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Trump should be careful about doing underwhelming speeches. But America’s political problems are clear, and will not be solved anytime soon. That is, too many old people in charge. Limit number and length of terms in Washington. Get rid of Schumer and Pelosi.

In a somber televised plea, President Donald Trump urged congressional Democrats to fund his long-promised border wall Tuesday night, blaming illegal immigration for the scourge of drugs and violence in the U.S. and framing the debate over the partial government shutdown in stark terms. “This is a choice between right and wrong,” he declared. Democrats in response accused Trump appealing to “fear, not facts” and manufacturing a border crisis for political gain. Addressing the nation from the Oval Office for the first time, Trump argued for spending some $5.7 billion for a border wall on both security and humanitarian grounds as he sought to put pressure on newly empowered Democrats amid the extended shutdown.

Trump, who will visit the Mexican border in person on Thursday, invited the Democrats to return to the White House to meet with him on Wednesday, saying it was “immoral” for “politicians to do nothing.” Previous meetings have led to no agreement as Trump insists on the wall that was his signature promise in the 2016 presidential campaign. Responding in their own televised remarks, Democratic House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer accused Trump of misrepresenting the situation on the border as they urged him to reopen closed government departments and turn loose paychecks for hundreds of thousands of workers. Negotiations on wall funding could proceed in the meantime, they said. Schumer said Trump “just used the backdrop of the Oval Office to manufacture a crisis, stoke fear and divert attention from the turmoil in his administration.”

As a partial U.S. government shutdown neared the three-week mark, Democrats on Wednesday were set to test Republicans’ resolve in backing President Donald Trump’s drive to build a wall on the border with Mexico, which has sparked an impasse over agency funding. House of Representatives Speaker Nancy Pelosi and her fellow Democrats who took control of the chamber last week plan to advance a bill to immediately reopen the Treasury Department, the Securities and Exchange Commission and several other agencies that have been in partial shutdown mode since Dec. 22. Democrats are eager to force Republicans to choose between funding the Treasury’s Internal Revenue Service – at a time when it should be gearing up to issue tax refunds to millions of Americans – and voting to keep it partially shuttered.

In a countermove, the Trump administration said on Tuesday that even without a new shot of funding, the IRS would somehow make sure those refund checks get sent. But it was the Republican president’s insistence on a massive barrier on the border that dominated the Washington debate and sparked a political blame game. In a nationally televised address on Tuesday night, Trump asked: “How much more American blood must be shed before Congress does its job?” referring to murders he said were committed by illegal immigrants.

Theresa May faces a concerted campaign of parliamentary warfare from a powerful cross-party alliance of MPs determined to use every lever at their disposal to prevent Britain leaving the EU without a deal in March. The former staunch loyalist Sir Oliver Letwin signalled that he and other senior Conservatives would defy party whips, repeatedly if necessary, to avoid a no-deal Brexit, as the government suffered a humiliating defeat during a debate on the finance bill in the Commons. Letwin and 16 other former government ministers were among 20 Conservatives who banded together with the home affairs select committee chair, Yvette Cooper, and the Labour leadership to pass an anti no-deal amendment.

They defeated the government by 303 votes to 296 – a majority of seven – making May the first prime minister in 41 years to lose a vote on a government finance bill. The move came after the PM conceded to senior ministers she was on course to lose next week’s historic Brexit vote, as the first cabinet meeting of the new year exposed deep divisions about the best way out of the deadlock. May told her cabinet she would respond swiftly with a statement to the House of Commons if she failed to win MPs’ backing for her deal next Tuesday. But cabinet sources said it was unclear what course she planned to take – and the general mood was of how “boxed in” the government was.

MPs will attempt to force the government to return with an alternative to Theresa May’s Brexit deal within three days of her plan being defeated in parliament. Another five-day debate leading up to a vote on May’s deal on 15 January will start on Wednesday, opened by the Brexit secretary, Stephen Barclay. Before that, MPs must approve a business motion to allow the debate and vote to go ahead, which a cross-party group of MPs, led by the Conservative Dominic Grieve, hope to amend if the Speaker allows it. The amendment says that following defeat of the government’s plan, which is widely anticipated, “a minister of the crown shall table within three sitting days a motion … considering the process of exiting the European Union under article 50”.

Other MPs who have signed the amendment include the former Tory cabinet minister Sir Oliver Letwin and ex-Tory ministers Jo Johnson, Guto Bebb and Sam Gyimah. It has also been backed by Labour MPs including Stephen Doughty and Chris Leslie. Sarah Wollaston, the Conservative chair of the health select committee, who also signed the amendment, said the aim was to prevent the government “running down the clock” towards no deal. Previously, the Commons had mandated the government to make a statement within 21 days.

“If and when the PM’s plan is voted down on Tuesday, MPs can’t be made to wait potentially until 12 Feb for the next vote. The situation is too urgent now,” Leslie said. A previous amendment by Grieve that the Commons voted through before Christmas means that any statement the government brings forward after a defeat is in itself amendable – allowing MPs to put forward their own alternatives for the future of the Brexit process.

With just 80 days remaining until Brexit Day, March 29, nerves are fraying on both sides of the English Channel. Nowhere is this more true than in the City of London where the Square Mile’s dominance of the global financial industry faces its biggest threat in decades. In the City’s worst-case scenario — a crash-out Brexit on March 29 — London-based firms that have not prepped properly for this outcome could be cut off from the continent altogether. Since moving key operations and staff across the channel is a costly, complex, timely undertaking, many companies have preferred to play a waiting game. But the clock continues to tick down, and as the risk of a disorderly exit grows, inaction is becoming a risky strategy.

Since the EU Referendum in June 2016, only 36% of the financial services companies in London have said they are considering or have confirmed relocating operations and/or staff to Europe, according to the latest edition of Ernst&Young’s Brexit Tracker (which monitors 222 financial services firms in the UK). This rises to 56% (27 out of 48) among universal banks, investment banks, and brokerages. A total of 20 companies have already announced a transfer of assets out of London to Europe. “Not all firms have publicly declared the value of the assets being transferred, but the Brexit Tracker has followed public announcements worth around £800 billion ($1 trillion),” the report says.

This figure echoes findings by a study published in November by German trade group Frankfurt Main Finance (FMF), which estimated that London is poised to lose €800 billion ($900 billion) in balance-sheet assets by March 29. According to German Bank Helaba, Frankfurt alone has attracted 25 lenders looking to move part of their operations out of the City of London, including Barclays, Lloyds Banking Group, Citigroup, Morgan Stanley, Credit Suisse, UBS, Nomura and Standard Chartered Bank.

The western view of China’s political economy is driven partly by anecdote, partly by accepting Beijing’s propaganda/economic data as fact. Foreign investors have convinced themselves that the Chinese Communist Party (CCP) is superior in terms of economic management, this despite ample evidence to the contrary, thus accepting the official view is easy but also increasingly risky. In a December 15 speech , Renmin University’s Xiang Songzuo warned that Chinese stock market conditions resemble those during the 1929 Wall Street Crash. He also suggested that the Chinese economy is actually shrinking. But this apostate view was quickly rejected by legions of captive western economists and investment analysts whose livelihood depends upon “selling China” to credulous foreign audiences.

Facts aside, the perception of China is what matters to global investors, part of a larger pathology of hope-based investment allocation that eschews those rare bits of hard data that disagree with the positive narrative. China growth, Tesla profitability, or the mystical blockchain all require more credulity than ever before. For example, in the first half of 2016 global capital markets stopped due to fear of a Chinese recession. Credit spreads soared and deal flows disappeared. But was this really a surprise? In fact, the Chinese government had accelerated official stimulus in 2015 and 2016 to counter a possible slowdown and, particularly, ensure a quiet domestic scene as paramount leader Xi Jinping was enshrined into the Chinese constitution.

Today western audiences are again said to be concerned about China’s economy and this concern is justified, but perhaps not for the reasons touted in the financial media. The China Beige Book (CBB) fourth-quarter preview, released December 27, reports that sales volumes, output, domestic and export orders, investment, and hiring fell on a year-over-year and quarter-over-quarter basis. Headed by Leland Miller, CBB is a research service that surveys thousands of companies and bankers on the ground in China every quarter.

Contrary to the positive foreign narrative about “growth” in China, CBB contends that deflation is the bigger threat compared to inflation. “Because of China’s structural problems, deflation has very clearly emerged as the bigger threat in a slowing economy than inflation. Consumer demand has weakened, and you see that reflected in retail and services prices,” CBB Managing Director Shehzad Qazi said in an interview.

China plans to introduce policies to boost domestic spending on items such as autos and home appliances this year, state television CCTV quoted a senior state planning official as saying on Tuesday. Ning Jizhe, vice chairman of National Development and Reform Commission (NDRC), said in an interview with CCTV that the policies will be part of wider efforts to strengthen domestic consumption in China, the world’s second largest economy. The state planner will also introduce policies in house leasing and services, as well as elderly and child care, with plans to also lower investment barriers in other sectors such as culture and sports. He also said that the NDRC planned to move ahead with a second batch of major foreign-invested projects in the first quarter of 2019, which could include new energy ventures, according to an interview transcript published by state news agency Xinhua.

Apple, which slashed its quarterly sales forecast last week, has reduced planned production for its three new iPhone models by about 10 percent for the January-March quarter, the Nikkei Asian Review reported on Wednesday. That rare forecast cut exposed weakening iPhone demand in China, the world’s biggest smartphone market, where a slowing economy has also been buffeted by a trade war with the United States. Many analysts and consumers have said the new iPhones are overpriced. Apple asked its suppliers late last month to produce fewer-than-planned units of its XS, XS Max and XR models, the Nikkei reported, citing sources with knowledge of the request. The request was made before Apple announced its forecast cut, the Nikkei said.

Apple Inc. stock has taken a beating in recent months, but Chief Executive Tim Cook defended his company Tuesday, and expressed optimism that trade tensions with China would soon ease. Apple shares have fallen by more than one-third since their peak on Oct. 3, and tumbled further last week after the tech giant warned of disappointing iPhone sales in its holiday quarter. But in an interview Tuesday with CNBC’s Jim Cramer, Cook said the company was still going strong, and its naysayers were full of “bologna.” “Here’s the truth, what the facts are,” Cook said about reports of slow iPhone XR sales, according to a CNBC transcript.

“Since we began shipping the iPhone XR, it has been the most popular iPhone every day, every single day, from when we started shipping, until now. . . . I mean, do I want to sell more? Of course I do. Of course I’d like to sell more. And we’re working on that.” Slower sales in China also contributed to Apple’s lowered forecast, and Cook said Tuesday he believes that situation to be “temporary.” “We believe, based on what we saw and the timing of it, that the tension, the trade-war tension with the U.S. created this more-sharp downturn,” he said. Cook said he’s “very optimistic” a trade deal between the U.S. and China will be reached. “I think a deal is very possible. And I’ve heard some very encouraging words,” he said.

OK, this is embarrassing in the land of super-stimulus via the ECB’s negative-interest-rate policy and years of QE that were supposed to perform miracles: Production in Germany’s industry, which includes construction, dropped 1.9% in November from the prior month (seasonally adjusted), the German statistical agency Destatis reported this morning. This drop is also embarrassing because economists polled by The Wall Street Journal had expected a 0.3% gain. The agency also downwardly revised October, to a monthly decline of 0.8%. This makes three months in a row of declines. In November, compared to a year earlier (adjusted for inflation and calendar differences, but not for seasonality), the production index dropped an ugly 4.7%:

Production was down in all major segments, including energy and construction which are focused on Germany itself, rather than exports. [..] Industrial production is a big power in the German economy. And the trend is not good. Germany’s GDP already declined in the third quarter:

The declines in production in October and November put Germany a step closer to “negative economic growth,” as it’s called euphemistically, for two quarters in a row. If this occurs, it would be a technical recession. And it’s not going to get a lot better soon: Destatis reported yesterday that new orders in manufacturing – a harbinger for future production – dropped 4.3% in November from a year ago (adjusted for inflation and calendar differences); and it revised down October’s orders to a year-over-year drop of 3.0%.

[..] this economic slowdown is occurring despite, or perhaps because of, the mother of all stimuli engineered by a major central bank – negative interest rates and massive QE – that has benefited a few hedge funds who were able to front run the ECB’s bond buys and make a quick buck, and bond traders for a while, as bond prices were rising due to falling yields. And it has allowed even junk-rated companies to borrow money for a song from beaten down investors, savers, and pension funds. But this stopped a year ago.

France is signaling it’s making preparations for a massive new crackdown on the gilets jaunes or “yellow vests” anti-government protests that have gripped the country for seven weeks. A new law under consideration could make any demonstration illegal to begin with if not previously approved by authorities, in an initiative already being compared to the pre-Maiden so-called “dictatorship law” in Ukraine. In the name of reigning in the violence that has recently included torching structures along the prestigious Boulevard Saint Germain in Paris, and smashing through the gates of government ministry buildings, the French government appears set to enact something close to a martial law scenario prohibiting almost any protest and curtailing freedom of speech.

Prime Minister Edouard Philippe presented the new initiative to curtail the violence and unrest while targeting “troublemakers” and banning anonymity through wearing masks on French TV channel TF1 on Monday. He said the law would give police authority crack down on “unauthorized demonstrations” at a moment when police are already arresting citizens for merely wearing a yellow vest, even if they are not directly engaged in protests in some cases. PM Philippe said the government would support a “new law punishing those who do not respect the requirement to declare [protests], those who take part in unauthorized demonstrations and those who arrive at demonstrations wearing face masks”.

Philippe’s tone during the statements was one of the proverbial “the gloves are off” as he described the onus would be on “the troublemakers, and not taxpayers, to pay for the damage caused” to businesses and property.

There is nothing like a big shot of leverage to fire up the stock market. And that’s what the market got in 2017, when the S&P 500 surged 26%, and in January 2018, when the index soared another 7.5% through January 26 – until suddenly something happened. One measure of leverage in the stock market is margin debt – the amount individual and institutional investors borrow from their brokers against their portfolios – which surged $22.9 billion in January to a new record of $665.7 billion, according to FINRA (Financial Industry Regulatory Authority), which regulates member brokerage firms and exchange markets, and which has taken over margin-debt reporting from the NYSE.

For the 12-month period through January, margin debt soared $112.2 billion, among the largest 12-month gains in the history of the data series, behind only the 12-month periods ending in: • December 2013 ($123 billion) • July 2007 ($160 billion) • March 2000 ($133.7 billion) • November 1997 ($132 billion). But it’s not just the recent surge; it’s the length of the surge. With only a few noticeable down periods, margin debt has soared for nine years in a row and now exceeds the prior peak of July 2007 ($416 billion) by 60%. By comparison, over the same period, nominal GDP (not adjusted for inflation) has grown 32%, and the Consumer Price Index has grown 20%.

In other words, margin debt has ballooned twice as fast from peak to peak as GDP and three times as fast as the Consumer Price Index. The chart below shows margin debt based on the FINRA data, which includes margin debt from its own member firms and from NYSE Member firms, and is therefore more complete and larger than the NYSE data was. For example, NYSE margin debt in November 2017, the last month available, was $580.9 billion while FINRA’s data for November showed margin debt of $627.4 billion. And in January, FINRA warned about the levels of margin debt – marked in green on the chart. Note the spike that started in June 2016:

When the China Insurance Regulatory Commission announced last week that it was seizing Anbang, the only surprise was that it took so long. Last year, the company was told to sell its overseas assets, its founder was placed behind bars, and banks were ordered to stop offering its products. So what, if anything, does this latest incident tell us about China’s economy and its attempt to crack down on debt? Anbang is often referred to as an insurance company, but this is misleading. Although the company does offer some run-of-the-mill products, such as property and casualty insurance, what really drove its growth were unusually structured life-insurance products. At the end of 2016, shortly before regulators intervened, property and casualty premiums made up a mere 4% of the group’s revenue. Life insurance made up 96%.

The growth in this business stunned even China analysts accustomed to tales of fabulous growth. From 2010 to 2016, Anbang’s annual life-insurance premium revenue increased from 1 million yuan to 114.2 billion yuan, or total growth of 11 million %. Even during a period of rapid economic expansion, annualized growth of 593% is amazing. The problem was that the life-insurance products were actually high-yielding debt instruments; investors could opt out of the insurance portion in as little as two years. With some products yielding more than 5% in the first three years, this essentially made Anbang a highly leveraged investor taking on significant risks to cover its cost of capital. Customers were basically extending loans to Anbang that it used to overpay for assets. Regulators finally stepped in to prevent a collapse that could have led to significant instability – with some 35 million customers demanding their money back.

Following the significant disappointment of January’s existing home sales, hopes were high for a rebound in new home sales (+3.5% expected after December’s 9.3% plunge) but those hopes were crushed as January new home sales crashed 7.8% MoM. This is the lowest level since August, even as the supply of homes at current sales rate climbed to 6.1 months from 5.5 months.

This is the biggest two-month drop in new home sales SAAR since August 2013. The Median price dropped from $336,700 to $323,000 – the lowest since October…

16% of new homes sold in January cost more than $500,000, down from 22% last month. As sales in the Northeast collapsed: • Northeast -33.3%, from 36K to 24K • Midwest +15.4%, from 65K to 75K • South -14.2%, from 351K to 301K • West +1.0%, from 191K to 193K So we are sure NAR will blame ‘inclement’ weather – as opposed to soaring rates and plunging affordability. Just as we warned previously, the following chart shows, that surge in rates will have a direct impact on home sales (or prices will be forced to adjust lower) as affordability collapses… This won’t end well.

As of the latest reporting by the Treasury Department, the US gross national debt rose by $41.5 billion on Thursday, February 22, to a grand total of $20.8 trillion. Here’s the thing: On September 7, 2017, five-and-a-half months ago, just before Congress suspended the debt ceiling, the gross national debt stood at $19.8 trillion. At that time, I was holding my breath waiting for the gross national debt to take a huge leap in a single day – as it always does after the debt ceiling gets lifted or suspended – and jump to the next ignominious level. It sure did the next day, when it jumped $318 billion. And it continued. Over a period of 8 weeks, the gross national debt jumped by $640 billion.

Four weeks after that, it had ballooned by $723 billion, at which point Fed Chair Yellen – whose cheap-money policies had enabled Congress to do this for years – said that she was “very worried about the sustainability of the US debt trajectory.” Then Congress served up another debt ceiling – a regular charade lawmakers undertake to extort deals from each other, beat the White House into submission, and keep the rest of the world their on their toes. It goes like this: First they pass the spending bills, directing the Administration to spend specific amounts of money on a gazillion specific things spread around specific districts. Then they block the means to pay the credit card bill. That debt ceiling was suspended on February 8, at which point the gross national debt began to surge again, adding $960.4 billion, a 5% jump in the gross national debt in just 5.5 months:

Markets were up again big today and volatility was down. But we haven’t seen the last of rising volatility, nor of the central banks’ attempts to thwart it. This week, new Fed Chair Jerome Powell will be giving his first congressional testimony, and you can be sure that markets are waiting on his words with bated breath. Before his testimony, the Fed will be releasing its Monetary Policy Report, which will also give an indication to the direction of Fed policy. Because these will be his first official comments as Fed chair, Powell will want to both make a personal mark and make sure markets don’t panic over his remarks. I believe he will temper his comments to neutralize any negative market impact the report could have. Wall Street wants to hear that Powell’s not going to aggressively hike rates.

The risk is that, as an article from CNBC reports, “Powell may not clarify anything,” in which case, “traders could be stuck with the same dilemma that shook stocks and sent bond yields spiking [last] Wednesday after the release of the minutes from the Fed’s January meeting.” I think Powell will sound as dovish as he can to avoid that outcome. So even if he confirms rate hikes will be executed at the already forecast pace of three rates this year, he won’t indicate there could be more, which should keep markets calmer and bullish. In other words, I don’t believe that Powell will implement dramatically different monetary policy from his predecessors Janet Yellen or Ben Bernanke. The Fed will do whatever the markets need. Banks have grown accustomed to what I call “dark money” and don’t want Powell to rock the boat.

What is dark money? Dark money basically means money coming from central banks. In essence, central banks “print” money or electronically fabricate money by buying bonds or stocks. They use other tools like adjusting interest rate policy and currency agreements with other central banks to pump liquidity into the financial system. That dark money goes to the biggest private banks and financial institutions first. From there, it spreads out in seemingly infinite directions, affecting different financial assets in different ways. These dark money flows stretch around the world according to a pattern of power, influence and of course, wealth for select groups. Dark money is the No. 1 secret life force of today’s rigged financial markets. It drives whole markets up and down. It’s the reason for today’s financial bubbles.

Corporate America, egged on by ridiculously-low borrowing costs, has built up more debt than any time since the end of the Great Recession. The credit binge has allowed companies to grow faster, invest in the future and reward shareholders with huge dividends and share buybacks. Yet elevated levels of debt will also make businesses vulnerable when the next recession strikes or if borrowing costs spike because of rising interest rates. Either outcome will make it harder for Corporate America to pay back the $4 trillion of debt coming due by 2022. This risk has been underlined by the recent surge in Treasury yields and rising concerns that inflation could force the Federal Reserve to consider aggressive rate hikes.

“Removing the easy money punch bowl could trigger the next default cycle,” S&P Global Ratings wrote in a recent report titled “Debt high, defaults low – something’s gotta give.” For nearly a decade, companies have taken advantage of extremely cheap money set by the Fed and foreign central banks trying to pump up sluggish growth. Excluding the highly leveraged financial sector, corporate debt relative to GDP matched an all-time high during the third quarter of 2017, according to an analysis of the most recent numbers by Informa Financial Intelligence. “It’s certainly a reason to be cautious, particularly when we are long into this growth cycle and the Fed is raising rates,” said David Ader, chief macro strategist at Informa Financial Intelligence. “Everything is fine and well – until it isn’t,” he said.

Much has been written recently about whether companies are going to look overstretched as monetary policy is tightened and bond yields rise. Some excellent research on European non-financial corporates by our Bloomberg Intelligence colleagues Laurent Douillet and Tim Craighead shines more light on the subject. It’s a slightly worrying picture. First off, they looked at cumulative free cash flows over the five years between 2012 and 2016, and then compared them with shareholder payouts and M&A spending. In every sector, except telecoms, free cash flow was exceeded by combined dividends, buybacks and deal-making, as this chart shows:

Consumer companies, drugs makers and industrials have splurged the most on dividends and takeovers. When you take a first glance at leverage, this doesn’t appear to be the end of the world. When you look at the most recent period, net debt to Ebitda looks pretty undemanding, except for the utilities – which are something of a problem child in Europe generally. Even if you look at free cash flow as a proportion of total debt, utilities are probably the only real outlier. Yet if you take a stricter view of what makes up debt, and include pension deficits and operating lease obligations, things start to look less benign. Operating leases are something that Gadfly’s Chris Bryant has looked at before, as companies will have to include them as part of their assets and associated debts when the new IFRS 16 accounting rules come in next year. If you use an adjusted measure of debt by including pensions and leases, as our BI colleagues have done, you get this:

Central banks need to stay vigilant as uncertainty remains over the impact of the normalization of monetary policies in advanced economies, IMF Managing Director Christine Lagarde said. “We have known for some time that this is coming, but it remains uncertain as to how exactly it will affect companies, jobs, and incomes,” Lagarde told a conference in Jakarta on Tuesday. “Clearly, policy makers need to stay vigilant about the likely effects on financial stability, including the prospect of volatile capital flows.” Stock markets from the U.S. to Asia were in turmoil in recent weeks on concerns that the U.S. could raise interests rates at a faster pace than previously thought. Investors are awaiting Jerome Powell’s first public comments in the role of Fed chairman on Tuesday.

The global economy is on a broad-based upswing, involving about two-thirds of the world, and it offers an opportunity to reform financial markets, upgrade labor laws, and lower barriers to entry in overly protected industries, Lagarde said. The IMF forecasts global economic growth of 3.9 percent this year and in 2019. “As I have been saying recently, the time to repair the roof is when the sun is shining,” Lagarde said. “Repairing the roof also means using fiscal reforms to generate higher public revenues, where needed, and improve spending. By boosting public finances, countries can increase infrastructure investment and development spending, especially on social safety nets for the most vulnerable.‘”

The United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest, the International Energy Agency (IEA) said on Tuesday, as the country’s shale oil boom continues to upend global markets. IEA Executive Director Fatih Birol said at an event in Tokyo the United States would overtake Russia as the biggest crude oil producer “definitely next year”, if not this year. “U.S. shale growth is very strong, the pace is very strong … The United States will become the No.1 oil producer sometime very soon,” he told Reuters separately. U.S. crude oil output rose above 10 million barrels per day (bpd) late last year for the first time since the 1970s, overtaking top oil exporter Saudi Arabia.

The U.S. Energy Information Administration said early this month that U.S. output would exceed 11 million bpd by late 2018. That would take it past top producer Russia, which pumps just below that mark. Birol said he did not see U.S. oil production peaking before 2020, and that he did not expect a decline in the next four to five years. The soaring U.S. production is upending global oil markets, coming at a time when other major producers — including Russia and members of the Middle East-dominated OPEC — have been withholding output to prop up prices. U.S. oil is also increasingly being exported, including to the world’s biggest and fastest growing markets in Asia, eating away at OPEC and Russian market share.

A Labour Party led by Jeremy Corbyn as the party of business? JC as the last, best hope for the business community? It’s the sort of thing that would make even one of those nutty internet conspiracy theorists who believe that contactless payments are a satanic plot scoff. Now? Now we’re in Terri May’s Brexit wonderland and the Cheshire Cat is pissing himself. Madness is part of everyday life and nothing seems strange anymore, not even the CBI’s director general Carlyn Fairbairn saying this: “The Labour leader’s commitment to a customs union will put jobs and living standards first by remaining in a close economic relationship with the EU. It will help grow trade without accepting freedom of movement or payments to the EU.”

Or Stephen Martin, the director general of the Institute of Directors, saying this: “Labour has widened the debate today on the UK’s relationship with the EU post-Brexit, and many businesses, particularly manufacturers, will be pleased to hear the Opposition’s proposal to keep a customs union on the table.” You remember the scene from the Wachowskis’ Matrix where Morpheus references Lewis Carroll’s most famous work? “You take the blue pill, you stay in your bed and believe whatever you want to believe. You take the red pill, you stay in wonderland and I show you how deep the rabbit hole goes.” With the Tory party having taken leave of its senses in favour of plunging us into a nightmare beyond anything either Carroll or the the brothers could have conceived, the red pill suddenly doesn’t seem quite as scary as it once did, not now the Tories’ mad ideologues are making merry. The Corbyn rabbit hole might actually be the better option.

A report by the Intergenerational Foundation, a charity that funds research into issues that divide the generations, has found that far from losing out to younger people, baby boomers have proved themselves adept at ensuring they are the winners across many areas of public policy. Governments, say the authors, have been “tempted by short-term pressures to set rates that clearly disadvantage the young and favour the older generations” – compare university fees charged at an interest rate of 6.1% with the 2% the elderly are charged on loans to pay for residential care costs. Another example can be found in the rates of interest offered on state-sponsored savings bonds. The pensioner bond, which was launched by George Osborne and proved so popular it was credited with helping the Tories secure a majority in the 2015 general election, paid a 4% rate of interest.

National Savings bonds for everyone else pay a maximum 2.2%. Worst of all is the huge bill in store for younger people in 30 or 40 years’ time by virtue of the current calculations of future liabilities. Pension liabilities are top of the list, with public sector pensions in particular carrying a heavy cost. The foundation’s concern is that the government overestimates the state’s capacity to pay for future liabilities by exaggerating how fast the UK’s income will grow over time. If GDP growth is forecast at an absurdly high rate then the income will supposedly be in place to pay generous pension payments in 30 years. If that growth fails to materialise, those who are in their 20s and 30s today will need to find large sums of cash to fill the hole when they are in their 50s and 60s.

The debate centres on the discount rate, which is the calculation of a fund’s long-term growth, which is used to reflect how much money should be set aside today to pay for tomorrow. Downgrade the discount rate by 0.5% and the government will need to set aside additional pension contributions worth 3% of salaries, it says. “From this you can see very starkly why representatives of older workers have been lobbying strongly for higher discount rates. If they succeed in keeping discount rates 1% above what they should be, they have essentially transferred 6% of the total pension bill for each of these years from the old to the young, so the young will have to pay this bill,” the authors say.

The New York Fed publishes the always-interesting Quarterly Report on Household Debt and Credit. The Q4 2017 version came out recently. In total, Americans carried $13.15 trillion in debt as of year-end 2017. Most of it is mortgage debt—about 71% of the total, if you include home equity loans. Much to our surprise, the next-largest category isn’t auto loans or credit cards. It’s student loans, which are now 10% of total debt. Their share has been growing steadily. This might be okay if the debt enhanced the student’s financial security, but for millions of Americans, that’s not what has happened. Borrowers don’t achieve the desired results but remain stuck with the debt anyway. While delinquency rates for other forms of debt fell after the recession, student loans didn’t. As of year-end 2017, about 11% of nearly $1.4 trillion in student debt was at least 90 days delinquent.

It’s actually worse than that. Roughly half of student debt is held by borrowers who aren’t required to make payments yet. That’s because they are still in school, unemployed, or otherwise excused. Much of that debt would likely be delinquent too. Also important: The delinquent loans tend to be small (less than $10,000) and held by borrowers who never earned degrees. These borrowers probably thought they were doing the right thing. They wanted decent jobs and saw that having a college degree was necessary to get one. So why is college the key to gainful employment? It hasn’t always been so. It’s because employers require a degree as a job qualification… and that’s partly the fault of IQ tests.

[..] College degrees are convenient, legal substitutes for the kind of testing employers haven’t been able to use since the 1970s. So apart from whatever you learn in college, merely having the credential became necessary to career success. As a result, everyone in the equation made certain choices. • Employers: demand a college degree even for jobs that don’t require college-level skills. • Workers: get a college degree even if you must take on debt. Colleges: Raise prices since so many students are begging for degrees.
This made college more expensive, forcing students to borrow more and more money.

Politicians jumped in to promote and guarantee those loans. And here we are.

A coalition of 20 U.S. states sued the federal government on Monday over Obamacare, claiming the law was no longer constitutional after the repeal last year of its requirement that people have health insurance or pay a fine. Led by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel, the lawsuit said that without the individual mandate, which was eliminated as part of the Republican tax law signed by President Donald Trump in December, Obamacare was unlawful. “The U.S. Supreme Court already admitted that an individual mandate without a tax penalty is unconstitutional,” Paxton said in a statement.

“With no remaining legitimate basis for the law, it is time that Americans are finally free from the stranglehold of Obamacare, once and for all,” he said. The U.S. Justice Department did not immediately respond to a request for comment on whether the Trump administration would defend the law in court. The individual mandate in Obamacare was meant to ensure a viable health insurance market by forcing younger and healthier Americans to buy coverage. Republicans have opposed the 2010 law formally known as the Affordable Care Act, the signature domestic policy achievement of Trump’s Democratic predecessor Barack Obama, since its inception.

The U.S. Supreme Court rejected a Trump administration appeal aimed at ending deportation protections for young undocumented immigrants, steering clear for now of the debate over the fate of hundreds of thousands of people. The justices, without published dissent, turned away the administration’s appeal of a ruling that has kept the Obama-era program in place. The rejection buys time for the so-called dreamers even as Congress has been unable to agree on legislation to give them permanent protection. The Senate earlier this month blocked three proposals that would have shielded the dreamers. The administration was asking the Supreme Court to take the unusual step of bypassing an appeals court and granting fast-track review of a federal trial judge’s decision.

The court’s rebuff leaves open the possibility that the justices could consider the case later, after a San Francisco-based federal appeals court hears it. “It is assumed that the Court of Appeals will proceed expeditiously to decide this case,” the Supreme Court said in its two-sentence order. The Deferred Action for Childhood Arrivals program “is clearly unlawful,” White House spokesman Raj Shah said in a statement. “We look forward to having this case expeditiously heard by the appeals court and, if necessary, the Supreme Court, where we fully expect to prevail,” he said. DACA, begun under President Barack Obama, protects undocumented immigrants who were brought to the U.S. as children. Applicants are shielded from deportation and allowed to apply for work permits.

The first group of DACA recipients had been set to lose their protected status in March before U.S. District Judge William H. Alsup’s Jan. 9 order. The Trump administration appeal argued that the judge’s order “requires the government to sanction indefinitely an ongoing violation of federal law being committed by nearly 700,000 aliens.” The administration resumed accepting DACA renewal applications after the order. Congress is at an impasse over legislation to protect the dreamers, as President Donald Trump and many Republicans insist that it must be combined with strict new limits on legal immigration. Even though the judge’s order means the prior March deadline isn’t in force, House Speaker Paul Ryan of Wisconsin said this month, “we want to operate on deadlines. We clearly need to address this issue in March.”

Alsup said the Department of Homeland Security based its decision to end the program on the “flawed legal premise” that Obama lacked the authority to set it up in the first place. In issuing his temporary order, which extends the protection while the lawsuit goes forward, Alsup said the “public interest” would be served by keeping the program in place. The judge pointed to Trump tweets that suggested he actually supported DACA. A September tweet read: “Does anybody really want to throw out good, educated and accomplished young people who have jobs, some serving in the military? Really! . . . .” Alsup wrote: “We seem to be in the unusual position wherein the ultimate authority over the agency, the chief executive, publicly favors the very program the agency has ended.”

The excruciating quandary President Trump presents to the nation is dragging the sad remnant of the thinking class ever-deeper into a netherworld of desperation, paranoia, and mendacity that may exceed even their own official fantasies about the enemy in the White House. Everything about the lumbering, blundering occupant of 1600 Pennsylvania Avenue drives his Dem/Prog opponents — or #Resistance, if you will — plumb batshit: his previous incarnations as a shady NYC real estate schmeikler, as a TV clown, as a business deadbeat, as a self-described pussy-grabber… his vulgar casinos, his mystifying hair-do, his baggy suits and dangling neckties, his arrant, childish, needless lying about trivialities, his intemperate tweets, his unappetizing associates, his loutish behavior in foreign lands, his fractured, tortured syntax, his obvious insincerity, his sneery facial contortions… and lots lots more — and of course that doesn’t even touch the actual policy positions he struggles to articulate.

In sum, Trump represents such a monumentally grotesque embarrassment to the permanent Washington establishment that they will pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the removal of this odious caitiff. And in the process abandon all reason and decency. To complicate matters, there really are policy differences that, despite Mr. Trump’s oafish profferings, must somehow be faced for the sake of the country’s future — two of the clearest, just for example, being whether we will have coherent, enforceable immigration laws and whether we will continue to allow the sale of tactical military rifles to the general public. These are matters, by the way, which people of sound mind and honorable intentions could actually resolve through open legislative debate.

[..] in creating this horror movie, the #Resistance is dangerously perverting institutions that may not recover from being written into the script. For instance, the Department of Justice, its subsidiary, the FBI, and sundry intel outfits whose highest officers have been enlisted as cast members. Can I be alone in wondering how these agencies can mount massive prosecutions of nobodies like George Papadopoulos and Rick Gates while ignoring the much better documented intrigues of officials such as Bruce Ohr, Andrew McCabe, Peter Strzok, Lisa Page, Sally Yates, James Comey, Loretta Lynch, John Brennan, Debbie Wasserman-Schultz, Hillary Clinton, and possibly even the sainted Barack Obama?

Just as was the case with the crisis in Aleppo in 2016, the crisis in east Ghouta today is the subject of much handwringing in the Western media. There are also – just as there were in 2016 – pleas to President Putin to “show mercy”. In 2016 these pleas came mainly from British Foreign Minister Boris Johnson. This time they are coming from German Chancellor Merkel and French President Macron. Meanwhile – as in 2016 – there is grandstanding against Russia at the UN Security Council by the US’s UN ambassador. In 2016 it was Samantha Power; this time it is Nikki Haley. Just as in 2016 we are now seeing overheated and hysterical demands for ‘military action’ to ‘bring the killing to a stop’, with all concerns about what that might lead to brushed aside.

To complete the truly extraordinary parallels, there has even been a US bombing raid on Syrian forces far away in eastern Syria in Deir Ezzor province, just as there was during the fighting in Aleppo in 2016. Moreover the Russian response to the US threats and to the US bombing raid appears to be the same as it was in 2016: the deployment of further powerful additional military forces to Syria and to Khmeimim air base. In 2016 it was S-300VM Antey 2500 anti aircraft missiles; today it is additional S-400 anti aircraft missiles and (reportedly) SU-57 fighters. As to what is really behind the furious campaign to stop the attack on east Ghouta, it is the same as was the case with the furious campaign to stop the attack on eastern Aleppo in 2016: to prevent a Jihadi enclave which threatens one of Syria’s two great cities – Aleppo in 2016, Damascus today – from being destroyed.

As to what would actually happen if – or rather when – that Jihadi enclave is finally destroyed, I can do no better than quote Marcus Papadopoulos “Once East Ghouta is liberated from Al-Qaeda, the world will see the same response from its inhabitants as the world saw once East Aleppo was liberated: jubilation. And, like with East Aleppo, East Ghouta will serve as another testimony about the facade that is the White Helmets.” Why all these frantic attempts to save an Al-Qaeda controlled Jihadi enclave from being destroyed near Damascus? The short answer is that just as the destruction in 2016 of the Jihadi enclave in eastern Aleppo showed to the Western ‘democracy promotion’ lobby that their regime change war in Syria could not be won, so the destruction of the Jihadi enclave in east Ghouta near Damascus today would show to the Western ‘democracy promotion’ lobby that their regime change war in Syria is irretrievably lost.

Women in Syria have been sexually exploited by men delivering aid on behalf of the UN and international charities, the BBC has learned. Aid workers said the men would trade food and lifts for sexual favours. Despite warnings about the abuse three years ago, a new report shows it is continuing in the south of the country. UN agencies and charities said they had zero tolerance of exploitation and were not aware of any cases of abuse by partner organisations in the region. Aid workers told the BBC that the exploitation is so widespread that some Syrian women are refusing to go to distribution centres because people would assume they had offered their bodies for the aid they brought home. One worker claimed that some humanitarian agencies were turning a blind eye to the exploitation because using third parties and local officials was the only way of getting aid into dangerous parts of Syria that international staff could not access.

The United Nations Population Fund (UNFPA) conducted an assessment of gender based violence in the region last year and concluded that humanitarian assistance was being exchanged for sex in various governorates in Syria. The report, entitled “Voices from Syria 2018”, said: “Examples were given of women or girls marrying officials for a short period of time for ‘sexual services’ in order to receive meals; distributors asking for telephone numbers of women and girls; giving them lifts to their houses ‘to take something in return’ or obtaining distributions ‘in exchange for a visit to her home’ or ‘in exchange for services, such as spending a night with them’.” It added: “Women and girls ‘without male protectors’, such as widows and divorcees as well as female IDPs (Internally Displaced Persons), were regarded as particularly vulnerable to sexual exploitation.” Yet this exploitation was first reported three years ago.

Danielle Spencer, a humanitarian adviser working for a charity, heard about the allegations from a group of Syrian women in a refugee camp in Jordan in March 2015. [..] “I remember one woman crying in the room and she was very upset about what she had experienced. Women and girls need to be protected when they are trying to receive food and soap and basic items to live. The last thing you need is a man who you’re supposed to trust and supposed to be receiving aid from, then asking you to have sex with him and withholding aid from you.” She continued: “It was so endemic that they couldn’t actually go without being stigmatised. It was assumed that if you go to these distributions, that you will have performed some kind of sexual act in return for aid.”

The great credit party that’s taken yield premiums in major markets down around lowest in a decade is probably months away from an end, as central banks normalize monetary policy and the economic outlook softens, Societe Generale predicts. “We expect next year to be a transition year, when the ultra-low yield environment finally starts to lose its grip,” Societe Generale credit strategists Juan Esteban Valencia and Guy Stear wrote in a note. “The U.S. and the eurozone are heading for an economic slowdown in 2019, and given the rising levels of corporate leverage, this should have an impact on credit.” U.S. investment-grade bond premiums will widen by mid-2018, with European counterparts following suit, as credit markets price in the economic slowdown, they wrote.

“The sword falls in 2H,” they predicted in a report that recognized last year’s annual outlook proved too bearish. Societe Generale had anticipated political risk to hurt credit in 2017, but changed tack by March as that didn’t pan out. Now, with global premiums having fallen further, “credit looks very pricey indeed,” they wrote. “Emerging market and high-yield markets are the most alarming.”

Money manager Peter Schiff correctly predicted the financial meltdown in 2008. Now, 10 years later, what does Schiff see today? Schiff says, “I predicted a lot more than just the stock market going down back then. I predicted the financial crisis, but more importantly, I predicted what the government would do as a result of the financial crisis and what the consequences of that would be because that’s where we’re headed. The real crash I wrote about in my most recent book is still coming. . . . This is the third gigantic bubble that the Fed has inflated, and when this one pops, it’s not going to be ‘the third time is a charm.’ It’s going to be ‘three strikes and you’re out.’ I think this bubble is too big to pop. I think it’s the mother of all bubbles, and when it bursts, there is not a bigger one that the Fed is going to be able to inflate to mask these problems, meaning we can’t kick the can down the road anymore.”

This time, the crisis is going to hit everyone in the wallet. Schiff goes on to say, “I think the problem we are going to be confronted with is going to be much worse than a financial crisis. It is going to be a dollar crisis, and it is going to be a sovereign debt crisis where the bonds people are worried about are not some sub-prime mortgages. . . . It’s going to be the U.S. government that people are worried about and the solvency of the U.S. government and the Treasury bonds. If it’s a dollar crisis and people are worried about the dollar, the only thing worse than owning a dollar today is owning the promise of being paid in dollars in the future. I don’t think we have the courage to default and admit to our creditors that we don’t have the money and we can’t repay. I think we will create all the money that we need so we can pretend to repay, but what we end up doing is wiping out the debt with inflation.”

When the Q4 US resident population data is released, something that has not happened in the post WWII era will take place. The population of adults aged 15-64 years old will decline. This was not supposed to happen and will put an end to seven plus decades of continuous population growth which has meant a growing workforce, a growing consumer base, and growing tax base. A growing core US population, something considered as sacrosanct as the sun rising, will not happen. On a year over year basis, where there once were up to 3 million more homebuyers than the previous year, 3 million more car buyers than the year before, 3 million more potential customers…there will be likely be thousands fewer.

Many will assume this is a demographic issue of boomers exiting the working age population… but actually demographics is simply the early onset of a disease that will only progressively worsen. This is truly a population growth issue, not simply a demographic distribution problem. The economic system the US and world have adopted are dependent on perpetual growth on a quarter over quarter and year over year basis. Two negative quarters (or even zero growth) and a recession is called and all the Federal Reserve’s and federal governments tools are employed. Given the importance of growth, the most important factor in growing the economy is the rising demand represented by a growing population. But the US fertility rate has been negative for 45 years (chart below) meaning the native population (plus immigrants) have continually failed to replace themselves.

This means US population growth has simply been a story of immigration. And until 2000, N. America was the primary destination for the majority of the world’s immigrants. However, since ’00 and particularly since ’05, the migration patterns have significantly changed.

An almost two-year long study of the Chinese financial system by the International Monetary Fund found three major tensions that could derail the world’s second-largest economy. Those tensions emerged as China moves away from its role as the world’s factory to a more modern, consumer-driven economy, the IMF said. The financial sector is critical in facilitating that transition, but in the process it evolved into a more complicated and debt-laden system. “The system’s increasing complexity has sown financial stability risks,” the fund said in the 2017 China Financial Sector Stability Assessment report released on Thursday morning Asia hours. The report was a culmination of the fund’s several visits to China between October 2015 and September 2017.

The assessment is intended to identify key sources of systemic risk in the financial sector so that policies can be implemented to enhance resilience to shocks and problems that could spread across the globe. The first tension in China’s financial system, according to the IMF, is the rapid build-up in risky credit that was partly due to the strong political pressures banks face to keep non-viable companies open, rather than letting them fail. Such struggling firms have, in recent years, taken on more debt to achieve growth targets set by the authorities. The overall debt-to-GDP ratio in the Asian economic giant grew from around 180% in 2011 to 255.9% by the second quarter of 2017, data by the Bank for International Settlements showed. The rise coincided with a slowdown in productivity growth and pressures on asset quality in the banking system – increasing the risks faced by the Chinese economy.

The second tension identified by the IMF is that risky lending has moved away from banks to the less-regulated parts of the financial system, commonly known as the “shadow banking” sector. That adds to the complexity of the financial sector and makes it more difficult for authorities to supervise activities in the system, the IMF said. And the third issue identified by the international organization is that there’s been a rash of “moral hazard and excessive risk-taking” because of the mindset that the government will bail out troubled state-owned enterprises and local government financing vehicles. An example is the “implicit guarantees” that financial institutions offer when selling products to retail investors. That is a situation where the financial product sold are not guaranteed, but banks almost always compensate investors for principal losses by dipping into their own capital.

The People’s Bank of China, in response to the IMF assessment, said in a statement on its website that it disagrees with some points in the report but the fund’s recommendations are “highly relevant in the context of deepening financial reforms” in the country. One of the points the Chinese central bank said it disagrees with is the conclusion that many banks lack the ability to withstand shocks. The IMF’s stress tests found that 27 out of 33 banks studied were under-capitalized. But the PBOC said the Chinese financial system is resilient.

NiceHash, the marketplace for cloud-based mining of cryptocurrencies, said hackers breached its systems and stole an unknown amount of bitcoin from its virtual wallet. “We are working to verify the precise number of BTC taken,” the company said Wednesday in a statement on its Facebook page. It’s halting operations for 24 hours, it said. The venture’s main webpage showed a “maintenance” error message, linking to its social media accounts. NiceHash helps match people who can spare computing capacity with miners looking to solve complex math problems to obtain a variety of new coins. It later facilitates periodic payments to the service providers with bitcoin. A wallet address circulated by NiceHash users shows that more than $60 million of bitcoins might be affected, according to CoinDesk, the cryptocurrency research and news website.

President Donald Trump on Wednesday said that a government shutdown “could happen” as soon as Saturday. “It could happen,” Trump said during a Cabinet meeting at the White House, in response to a reporter’s question about the Friday deadline for a spending bill to fund the government. “The Democrats are really looking at something that could be very dangerous for our country,” Trump said. “They are looking at shutting down. They want to have illegal immigrants, in many cases people that we don’t want in our country, they want to have illegal immigrants pouring into our country, bringing with them crime, tremendous amounts of crime.” Congress has until midnight on Friday to approve a short-term spending package to keep the government open. Despite majorities in both chambers, Republicans will need Democratic votes to pass the bill.

House Minority Leader Nancy Pelosi, D-Calif., responded on Twitter to Trump’s comments saying: “President Trump is the only person talking about a government shutdown. Democrats are hopeful the President will be open to an agreement to address the urgent needs of the American people and keep government open.” What congressional Democrats want in exchange for supporting the spending bill are permanent protections for the nearly 800,000 young, undocumented immigrants currently living in the United States who were brought here as children, the so-called Dreamers. Earlier this year, Trump canceled an Obama-era protection policy for Dreamers, the Deferred Action for Childhood Arrivals program, or DACA. The president’s order gave Congress until March 2018 to pass a bill with DACA-like protections.

US President Donald Trump has called on Saudi Arabia to end its Yemen blockade immediately, citing humanitarian concerns. Mr Trump said in a statement that he has directed US officials to call Saudi Arabian leaders and request they “completely allow food, fuel, water and medicine to reach the Yemeni people.” He said Yemenis “desperately need it.” A Saudi-led coalition has been fighting to defeat the Iran-backed Houthis and Yemeni President Ali Abdullah Saleh’s forces in Yemen since March 2015 with the aim of reinstating the internationally recognized government of Mr Saleh’s successor, Abed Rabbo Mansour Hadi. The US has been supporting the coalition through weapons sales, some intelligence sharing, and refuelling capabilities for air operations.

Since the conflict began, at least 10,000 people have died as a result and 40,000 have been wounded, Al Jazeera reported. Mr Saleh was killed earlier this week after moving to switch allegiances in the bloody conflict, making the situation in the country unpredictable according to experts. [..] The Saudi-led coalition had imposed a blockade on the country last month after Houthi rebels fired a missile on the Saudi capital of Riyadh. It responded by sending a slew of missiles into Yemen’s capital Sanaa. The blockade was partially lifted at the Hudaya port of the international airport in Sanaa and the first aid shipments were allowed to enter the country just last week. In the meantime, aid groups were forced to buy their own fuel in order to assist with relief work.

If you were a Martian visitor just disembarked from of one of Elon Musk’s rocket ships and were therefore uninfected by earth-based fake news, the culprits in Washington’s witch-hunt de jure would be damn obvious. They include John Brennan, Jim Comey, Sally Yates, Peter Strzok and a passel of deep state operatives – all of whom baldly abused their offices. After Brennan had concocted the whole Russian election meddling meme to sully the Donald’s shocking election win, the latter three holdovers – functioning as a political fifth column in the new Administration – set a perjury trap designed to snare Mike Flynn as a first step in relitigating and reversing the voters’ verdict. The smoking gun on their guilt is so flamingly obvious that the ability of the Trump-hating media to ignore it is itself a wonder to behold.

After all, anyone fresh off Elon’s rocket ship would learn upon even cursory investigation of the matter that the National Security Agency (NSA) intercepts electronically every single communication of the Russian Ambassador with any person on US soil – whether by email, text or phone call. So the clear-minded visitor’s simple question would be: What do the transcripts say? In fact, a Martian visitor would also quickly understand that the entire world – friend, rival, foe and enemy, alike – already knows of NSA’s giant digital spying operation owing to Snowden’s leaks, and that therefore there are no “sources and methods” on the SIGINT (signals intelligence) front to protect. Accordingly, the disinterested Martian would undoubtedly insist: Declassify the NSA intercepts and publish them on Facebook (and, for old timers, on the front page of the New York Times) so that the truth would be known to all.

Of course, that would punch a deep hole in the entire RussiaGate witchhunt because NSA, in fact, did record Flynn’s late December conversations with Russian Ambassador Kislyak. And there was not a single word in them that related to alleged campaign collusion or otherwise inappropriate communications by the in-coming national security adviser to a newly-elected President who was three-weeks from inauguration. Indeed, as explained below, Mueller has effectively told us that Flynn’s communications with Kislyak were clean as a whistle.

The rise of Corporate Power was the fall of democracy. Over the long haul, US politics has revolved around a deep tension between democracy and an unrelenting drive for plunder, power and empire. Granted that our democracy has been seriously flawed and only rarely revolutionary, yet the democratic movements are the source of every good thing America has ever stood for. Since the mid-1970s, when the corporations fused with the state, a new imperial order emerged that killed what remained of representative democracy. Not only would corporations exercise public authority as only government once had, but government would coordinate and serve corporate activity. Power and profits became one and the same. Corporate power has replaced democracy with oligarchy and justice with a vast militarized penal system.

Instead of innovative production, they plunder people and planet. To achieve this new order, elections and the economy had to be drained of any remaining democratic content. Both Democrats and Republicans were eager to have at it. By the 1990s “Third Way” Democrats like Bill Clinton abandoned what was left of the New Deal to try to outdo the Republicans as the party of Wall Street. The Republicans pioneered election fraud on a national scale in 2000, 2004, and 2016; a lesson the Democrats learned all too well by the 2016 Primary. Neither major party wants election reform since free and fair elections would threaten the system itself. So-called private corporations like Facebook, Google and Twitter control information and manage the 1st Amendment.

The corporate media now broadcast propaganda and play the role of censor once monopolized by the FBI and CIA. The migration of propaganda work to civilian organizations began under Ronald Reagan. While both major parties offer the people nothing beyond austerity and the worst kind of identity politics, the big banks like Goldman Sachs gained positions of real influence with both Republican and Democratic administrations and always with the Department of the Treasury and the Federal Reserve. Without pubic money and political protection the banking system — the headquarters of the mythical free market — could not function.

European Union privacy regulators have threatened to bring a legal challenge to a year-old EU-U.S. pact on the cross-border transfer of personal data if their concerns about its functioning and U.S. surveillance practices are not resolved by the autumn of 2018, they said in a report. The EU-U.S. Privacy Shield pact was agreed last year after the European Union’s highest court had struck down the previous Safe Harbour Principles agreement which allowed companies to transfer European citizens’ personal data to the United States, due to concerns about intrusive U.S. surveillance of online data. The Privacy Shield pact enables companies to easily conduct everyday cross-border data transfers in compliance with EU data protection rules.

“The WP29 (Article 29 Working Party) has identified a number of significant concerns that need to be addressed by both the (European) Commission and the U.S. authorities,” the regulators – known as the Article 29 Working Party – said in their report. The European Commission, which negotiated the Privacy Shield deal, conducted its first annual review in September and said it was satisfied with the way it was working. It did however ask Washington to improve it, including by strengthening the privacy protections contained in a controversial portion of the U.S. Foreign Intelligence Surveillance Act (FISA), known as Section 702. Section 702 allows the U.S. National Security Agency to collect digital communications from foreign suspects living outside the United States. It is due to expire on Dec. 31 in the absence of congressional action.

A series of positive factors for the Greek economy are attracting U.S. investors back to the embattled euro zone nation, a government minister told CNBC. “There are many American investors who are interested in participating in projects in Greece, because every clever investor would be interested in an economy that now starts to have positive growth rates,” Dimitris Tzanakopoulo, Greek minister of state and the government spokesperson, told CNBC Monday. Following a meeting between President Donald Trump and Greek Prime Minister Alexis Tsipras in October, there’s a renewed interest from the U.S. in shoring up its investments in Greece, especially in the energy sector.

Aside from a bounce back in economic growth, Tzanakopoulo said that Greece was “a pillar of stability in a region” and is winning back investors. “(The region) has many, many problems, wherever you look there’s destabilization, there is turbulence,” Tzanakopoulo said in his office in Athens. “We think we are one of the factors which will secure and guarantee stability in the region and this is something everybody knows, from the U.S. to our European partners,” he said. At the crossroads of Europe, Asia, and Africa, Greece is a key ally for many Western countries in the face of escalating tumult in Turkey and the rest of the Middle East.

The decision by the Migration Policy Ministry to expand and upgrade hot spots on Chios and Lesvos have cultivated a tense atmosphere, as critics say it will do nothing to ease pressure on the eastern Aegean islands and or to alleviate the situation of thousands of stranded refugees and migrants crammed in camps designed to hold far less people. Moreover, the onset of winter has made a bad situation even worse and the calls for authorities to accelerate asylum applications so as to transfer people to the mainland have become even louder. In the bid to deal with the deteriorating conditions, a team from Medecins Sans Frontiers (MSF) has, since last week, set up operations outside the Moria camp in Lesvos, offering assistance to those in need in cooperation with the Hellenic Center for Disease Control and Prevention (KEELPNO).

In a Facebook post, MSF said the harsh conditions and the cold are posing a serious threat to the health of the some 7,000 people that remain at the Moria hot spot. The group, which has called for the immediate transfer of those living at Moria to the mainland, has set up a mobile unit outside the camp to help children under the age of 16 and pregnant women. MSF is also distributing blankets, mattresses and other basic necessities as the situation, it said, is on the brink of a humanitarian crisis. At the same time, the Migration Policy Ministry is planning to transfer another 65 prefabricated huts to Moria in a bid to increase the camp’s capacity and to improve the living conditions of those that are still staying in summer tents. But the move is set to trigger more acrimony, as islanders and local authorities have said they do not agree with the expansion of the hot spot’s capacity.

Current predictions of climate change may significantly underestimate the speed and severity of global warming, according to a new study. Reappraisal of the models climate scientists use to determine future warming has revealed that less optimistic estimates are more realistic. The results suggest that the Paris Climate Agreement, which aims to keep global average temperatures from rising by 2C, may be overly ambitious. “Our study indicates that if emissions follow a commonly used business-as-usual scenario, there is a 93% chance that global warming will exceed 4C by the end of this century,” said Dr Ken Caldeira, an atmospheric scientist at the Carnegie Institution for Science, who co-authored the new study. This likelihood is an increase on past estimates, which placed it at 62%.

Climate models are vital tools for scientists attempting to understand the impacts of greenhouse-gas emissions. They are constructed using fundamental knowledge of physics and the world’s climate. But the climate system is incredibly complex, and as a result there is disagreement about how best to model key aspects of it. This means scientists have produced dozens of climate models predicting a range of different global warming outcomes resulting from greenhouse-gas emissions. Based on a “business-as-usual” scenario in which emissions continue at the same rate, climate models range in their predictions from a 3.2C increase in global temperatures to a 5.9C increase The new study, published in the journal Nature, sought to resolve this situation and establish whether the upper or lower estimates are more accurate.

To do this, Dr Caldeira and his collaborator Dr Patrick Brown reasoned that the most accurate models would be the ones that were best at simulating climate patterns in the recent past. “It makes sense that the models that do the best job at simulating today’s observations might be the models with the most reliable predictions,” said Dr Caldeira. Their conclusion was that models with higher estimates were more likely to be accurate, with the most likely degree of warming 0.5C higher than previous best estimates.

Almost everyone is familiar with Asia’s rags to riches story. The recent economic miracle led to huge increases in living standards across the region. Average incomes rose by factors of 100% to even 400% in some areas. Not to mention the number of people surviving on less than $2 USD a day was cut in half. A major turning point for this economic wonder was when China joined of the World Trade Organization in 2002. Shortly after, Asia’s contribution to the global GDP jumped from 11% to 21%. However, debt distorts these figures in a variety of ways. So, that begs the question; was it a miracle or just an illusion? What tricks does Asia have up its sleeve? Many are becoming increasingly anxious over Asia’s debt-fueled economy. Their fears may soon become a reality.

[..] Asia’s ability to consume credit seems never ending. Even during the recent financial crisis, Asia witnessed governments working hard to maintain cheap money flowing into their financial systems. The Chinese government implemented a stimulus package with record low interest rates. They wanted to mimic the methods used by other global central banks during the 2007 and 2008 financial crisis. Despite the large amount of media attention China’s borrowing levels received, they’re not special. As you can see in the chart below, credit levels have soared throughout Asia. Singapore, Hong Kong, Thailand, and Malaysia all have increased their debt to GDP ratios since 2001.

An increased dependency on cheap, available credit produced household debt to shoot up in South Korea and Taiwan. What are the possible outcomes? In many of these economies, high debt levels could lead to tragedy. The main culprit would be GDP growth rate’s inability to balance out spiraling debt levels. This situation is called the marginal productivity of debt. Or put more simply, new debt is not as efficient at creating new growth. Look at the chart below to see how the marginal productivity of debt plays out in Asian economies. Even major, regional growth contributors like South Korea, Japan and China, have experienced this downward trend. Indonesia is the only exception.

Since 2001 China’s marginal productivity has declined by a factor just short of 50%. Since investment has been one of China’s main growth drivers (almost entirely financed by debt), this is concerning. To add fuel to the fire, much of that debt has been funneled into China’s state-owned enterprises (SOEs). For instance, while corporate debt was at 165% of the GDP in 2015, SOEs made up 71% of it. Meanwhile, those SOEs only contributed around 20% to China’s total GDP.

For years China’s top officials have touted their ambitious policy priority to wean the world’s second-largest economy off high levels of debt, but there is not much to show for it. On the contrary, a Reuters analysis shows the debt pile at Chinese firms has been climbing in that time, with levels at the end of September growing at the fastest pace in four years. The build-up has continued even as policymakers roll out a series of measures to end the explosive growth of debt, including persuading state firms and local governments to prune borrowing and tighter rules and monitoring of banks’ short-term borrowing. By some estimates, China’s overall debt is now as much as three times the size of its economy.

Without a comprehensive strategy to tackle the overhang, there is a growing risk China will have a banking crisis or sharply slower growth or both, the IMF said last year. China’s central bank governor, Zhou Xiaochuan, made global headlines with a warning last month of the risks of a “Minsky moment”, referring to a sudden collapse in asset prices after long periods of growth, sparked by debt or currency pressures. On the sidelines of a key, twice-a-decade Communist Party Congress in October, Zhou referred to relatively high corporate debt and the fast pace of growth in household lending. While also pledging to fend off such risks, Zhou has acknowledged it will take some time to bring debt down to more manageable levels.

Reuters analysis of 2,146 China listed firms showed their total debt at the end of September jumped 23% from a year ago, the highest pace of growth since 2013. The analysis covered three-fifths of the country’s listed firms, but excluded financials, which have seen the brunt of government de-risking and deleveraging efforts so far.

China needs reform. This has long been the consensus advice from economists and multilateral institutions such as the World Bank, whose recent “China 2030” report argues that Chinese leaders should strengthen the role of markets and liberalize legal, financial and other institutions governing the economy. Their to-do list is virtually gospel by now: free up trade and investment, unshackle the exchange rate and ease capital controls. Such reforms are held not only to be worthy in themselves, but critical to solving China’s biggest problem: its debt, which has skyrocketed to well over 260% of GDP from 162% in 2008. The speed and scale of credit expansion has raised fears of a financial crisis, even from such normally staid figures as central bank governor Zhou Xiaochuan. The hope is that reforms will boost productivity enough to allow China to outgrow its debt burden before that crisis hits.

This logic is flawed for two reasons. First, China is unlikely to suffer a financial crisis, and this is precisely because of the government’s ability to restructure banking-sector liabilities at will. The real threat is different. Once a country’s debt burden is high enough to create uncertainty about allocating future debt-servicing costs, the debt itself becomes an obstacle to growth. This process – known as “financial distress” – is well-understood in finance theory but is still unfamiliar to many economists. So, unfortunately, is the corroborating history. In the past two centuries, there have been dozens of cases of overly-indebted countries whose policymakers have promised to implement liberalizing reforms meant to allow the country to outgrow its debt. None has succeeded. No excessively indebted country has ever outgrown its debt until a meaningful portion has been forcibly assigned to one economic sector or another.

There are many ways this can occur. Mexico restructured its debt at a discount in 1990, thereby forcing the cost onto creditors. Germany inflated the debt away after 1919, forcing the cost onto pensioners and others with fixed incomes. A decade ago, China forced the cost onto household savers through negative real interest rates. If it is going to regain sustainable growth, China, too, must deleverage. The only healthy way to do so is first, to force local governments to liquidate assets and assign part of the proceeds to debt reduction, and second, to wean China off its dependence on excessive investment by transferring wealth from local governments to households, so they can consume more.

I wanted to include this article because it raises a serious question. The countries with arguably the highest household debt levels (or close) are New Zealand, Australia, Holland, Sweden, Denmark, Norway. They are all missing from the OECD numbers. How can that be a coincidence?

The OECD warned that rising private debt loads in both advanced and developing economies pose a risk to growth as Canada, South Korea and the U.K. lead the world in household borrowing. “Household and corporate debt in many advanced and emerging market economies is high,” the OECD said Thursday in a pre-released section of a report to be presented next week. “While higher indebtedness does not necessarily imply that problems are just around the corner, it does increase vulnerability to shocks”. With the global economy showing its most even expansion since the financial crisis, debt levels and credit quality are among the risks that could trigger a downturn. Consumer debt tops 100% of GDP in Canada, with South Korea and Britain both above 80%. On corporate borrowing, the OECD warned about a shift in risk from banks to the bond market and a “substantial” decrease in credit quality.

Bit from Twitter: @JorgeStolfi: “Bitcoin’s market cap just passed 150 billion USD. For those who do not know, that is how much money NEW bitcoin “investors” will have to spend, in order for the current bitcoin holders to get the money that they THINK they have.”

As Bitcoin surges above $9,250 on the open this Sunday, I have to admit to having some real trepidation at these levels. I have been a proponent of the view that Bitcoin and cryptocurrencies would benefit from the launch of ETFs and futures. My view is that allowing for easier ‘adoption’ of Bitcoin will help fuel its growth as it lets new investors participate indirectly. I should not limit that theory to just more traditional ways to invest, like ETFs and futures, but should also include easier ways to establish wallets and to own Bitcoin (and other cryptocurrencies) the ‘traditional’ way. There are a growing number of ‘easy’ to use guides to getting Bitcoin (I have glanced at many but haven’t followed through to verify how well they work of don’t work).

I am convinced that ease of access and the potential for more mainstream products linked to Bitcoin has helped fuel its surge. But now, I am concerned it has gone too far, too fast. I have three major concerns that could slow the price rise or even cause it to have a significant correction (yes, I am converting from bullish Bitcoin to at best neutral). Here are the three concerns:

1) Are all the ETF and Futures launches a ‘sell the news’ event? Basically the question is, while I believe that easier adoption will lead to inflows, how much of that is priced in? Have speculators loaded their electronic wallets with Bitcoin hoping to capitalize on the expected gains to the point, there won’t be more expected gains? Understanding when something is ‘already’ priced in is difficult at the best of times, let alone with something as complex and growing exponentially like Bitcoin, but, I can’t help but wonder. I have felt a switch in discussions I’m having over the last few weeks. A subtle switch, but one where the Bitcoin bulls seem more eager to name ever higher price targets, while the agnostics seem more willing to do work and think about it more, rather than in a rush to get some money into Bitcoin. The sort of behavior that may be indicating a ‘sell the news’ type of environment.

2) There are becoming too many competing investments which are causing some investors to question how ‘real’ the existing ones are. Yes, I understand that ICO’s aren’t necessarily dilutive, if you can purchase them with Bitcoin, but it does start to appear odd when it seems like virtually every day, someone or some entity is announcing some new variation on the theme.

3) Fedcoin, the potential for the Fed could be classified within concern number 2, but is really only part of a larger, separate concern – that governments or central banks will push back. I read this week, along with a lot of other people, an article describing that Bitcoin was now worth more than McDonald’s. While that sort of article is designed to ‘shock’ investors, especially more conservative investors, I think it represents a larger, growing concern that the ‘establishment’ has surrounding cryptocurrencies. Whether the concerns are more focused on the potential for illegal funds to enter the system, taxation, controlling ‘pump and dump’ schemes or making your own job more difficult to manage, I’m sensing they are rising to the surface again. I think we have hit another tipping point where to expect a response to attempt to slow down the growth and valuation of crytpocurrencies should be expected.

Something that has risen almost a ‘ten-bagger’ in less than a year is bound to attract attention. Bitcoin rebounded strongly after the China crackdown, so this fear might be over-rated, but a more organized government or central bank crackdown shouldn’t come as a surprise to anyone. The bigger question, in my mind, is whether Bitcoin can withstand that – but that is a question for another day. I am torn, because my thesis of ‘ease of adoption’ seems to be playing out and in general it is a long way from being fully played out, which by itself is supportive of greater price appreciation. But, at the moment, my concerns are winning out and I’d be taking some chips, or bits, as the case may be, off the table.

Italy’s anti-establishment 5-Star Movement wants international observers to monitor next year’s national election campaign to help ward off “fake news”, party leader Luigi Di Maio said on Sunday. His comments came after the ruling Democratic Party (PD) accused 5-Star supporters of using interlinked internet accounts to spread misinformation and smear the center-left government. Di Maio, who was elected 5-Star leader in September, said his party was often misrepresented by the traditional media and said the Organization for Security and Cooperation in Europe (OSCE) should oversee the forthcoming election. “The problem of fake news exists and we think it is necessary to have the OSCE monitor news and political debate during the election campaign,” Di Maio said on Facebook.

Such a request is unlikely to gain traction with 5-Star’s opponents, who allege that the maverick group is to blame for some of the most egregious smear campaigns. Last week unofficial Facebook accounts that back 5-Star published a photograph purportedly showing a close ally of PD leader Matteo Renzi attending the funeral of Mafia boss Salvatore Riina. In fact it was a photo taken in 2016 at the funeral of a murdered migrant. “Di Maio says he wants to call up OSCE monitors. Why doesn’t he call up U.N. peacekeepers and the Red Cross, and while he is at it, why not telephone (his associates) who are continuing to post this filth,” Renzi told a conference on Sunday. The sharing of false or misleading headlines and mass postings by automated social media “bots” has become a global issue, with accusations that Russia tried to influence votes in the United States and France. Moscow has denied this.

Some PD leaders called this weekend for legislation ahead of the elections, which are due by May, to crack down on the spread of false news. Renzi ruled that out on Sunday, but said his party would release twice-monthly reports on web abuses. “We do not want to shut down any website, but we want accountability,” Renzi said. The 5-Star party complains that it is unfairly treated by mainstream media, saying state broadcaster RAI is under the sway of the government, while the largest private media group is controlled by the family of former center-right prime minister Silvio Berlusconi. Italy’s leading newspapers, which are owned by large industrial concerns, have also been highly critical of 5-Star, which has promised a campaign against corruption and is seen as unfriendly to big business.

Latest polls show 5-Star has built a stable lead over other parties, with support of around 28% against 24% for the PD and 15% for Forza Italia. A new electoral law which encourages coalition building ahead of the vote, means Berlusconi’s center-right bloc should emerge as the single largest political force, albeit without a clear parliamentary majority.

The corporate/billionaires’ media would have us believe that the crisis we face is populism, a code word for every ugly manifestation of fascism known to humanity. By invoking populism as the cause of our distemper, the mainstream media is implicitly suggesting that the problem is “bad people” -those whose own failings manifest in an attraction to fascism. If we can successfully marginalize these troubled troglodytes, then our problem, populism, would go away and the wonderfulness, equality and widespread prosperity of pre-populist America will be restored. The problem isn’t populism -the problem is the status quo has failed 95% of the populace.

Life isn’t wonderful, prosperous and filled with expansive equality except in the Protected Elite of the top 5% of technocrats, corporate executives, tenured academics, bureaucrats, financiers, bankers, lobbyists and wealthy (or soon to be wealthy) politicos. The bottom 95% need a time machine to recover any semblance of prosperity. They need a time machine that goes back 20 years so they can buy a little bungalow on a postage-stamp lot for $150,000 on the Left and Right Coasts, because now the little bungalows cost $1 million and up. Housing valuations have become so detached from what people earn that even the top 5% has trouble qualifying for a jumbo mortgage without the help of the Bank of Mom and Dad or the family trust fund. The bottom 95% need a time machine to return to the days when college tuition and fees were semi-affordable–say, 30 years ago.

The bottom 95% also need a time machine to return to a time when they could afford healthcare insurance without government subsidies–a generation ago, or better yet, two generations ago. In an age where phantom wealth sprouts like poisoned mushrooms from speculative bubbles, the bottom 95% need a time machine that goes back 8 years so they buy the S&P 500 at 670, or better yet, buy bitcoin for $1 or $10, just to make up the loss in the purchasing power of their wages. Populism is the dismissive propaganda term that the media uses to distract us from the real cause of our problems: the total failure of the status quo, the corrupt, predatory, exploitive, inefficient, rentier pay-to-play-“democracy” cartel-state hierarchy that has failed the bottom 95%.

Britain will struggle to sign new free trade deals with economic powerhouses like India after Brexit unless it is willing to accept high levels of immigration from these countries into Britain. That’s according to Lord Bilimoria, co-founder of Cobra beer, and one of Britain’s most well-known entrepreneurs. Bilimoria spoke to Business Insider on Friday following International Trade Secretary Liam Fox’s claim that his efforts to make Britain a great trading nation are being undermined by the unwillingness of British businesses to export. The Indian-born British businessman described Fox as “utterly unfit” to serve as International Trade Secretary and claimed that nobody “across the board” in British business “has any respect” for the Conservative minister. “Nobody takes him seriously. That’s a fact,” Bilimoria told BI.

Bilimoria then described what he felt was a contradiction at the heart of the case for Brexit, in that Britain will not be able to significantly reduce inward migration — as many have Brexiteers promised — if it wants any hope of ambitious and wide-ranging free trade deals with countries like India. “What trade deals has he [Fox] actually done?” the life peer said. “The Indian high commissioner has warned that an agreement [between Britain and India] might not be in place until 2030 — and said talks haven’t even begun. “He said India will want the movement of professionals; the movement of doctors, the movement of engineers. He said both sides will benefit from this exchange. It won’t be a one-way street.”

After the Berlin Wall fell in November 1989 and the death of the Soviet Union was confirmed two years later when Boris Yeltsin courageously stood down the red army tanks in front of Moscow’s White House, a dark era in human history came to an end. The world had descended into what had been a 77-year global war, incepting with the mobilization of the armies of old Europe in August 1914. If you want to count bodies, 150 million were killed by all the depredations which germinated in the Great War, its foolish aftermath at Versailles, and the march of history into the world war and cold war which followed inexorably thereupon. To wit, upwards of 8% of the human race was wiped-out during that span.

The toll encompassed the madness of trench warfare during 1914-1918; the murderous regimes of Soviet and Nazi totalitarianism that rose from the ashes of the Great War and Versailles; and then the carnage of WWII and all the lesser (unnecessary) wars and invasions of the Cold War including Korea and Vietnam. [..] The end of the cold war meant world peace was finally at hand, yet 26 years later there is still no peace because Imperial Washington confounds it. In fact, the War Party entrenched in the nation’s capital is dedicated to economic interests and ideological perversions that guarantee perpetual war; they ensure endless waste on armaments and the inestimable death and human suffering that stems from 21st century high tech warfare and the terrorist blowback it inherently generates among those upon which the War Party inflicts its violent hegemony.

In short, there was a virulent threat to peace still lurking on the Potomac after the 77-year war ended. The great general and president, Dwight Eisenhower, had called it the “military-industrial complex” in his farewell address, but that memorable phrase had been abbreviated by his speechwriters, who deleted the word “congressional” in a gesture of comity to the legislative branch. So restore Ike’s deleted reference to the pork barrels and Sunday afternoon warriors of Capitol Hill and toss in the legions of beltway busybodies that constituted the civilian branches of the cold war armada (CIA, State, AID etc.) and the circle would have been complete. It constituted the most awesome machine of warfare and imperial hegemony since the Roman legions bestrode most of the civilized world. In a word, the real threat to peace circa 1991 was that Pax Americana would not go away quietly in the night.

Over the weekend, 620 refugees were forcibly removed from the now decommissioned prison on Manus Island, following a ruling in October that their incarceration was unconstitutional. Under instruction from Australia’s Immigration Minister Peter Dutton, prisoners were beaten with steel bars by Papua New Guinea’s paramilitary guards, starved of food, water, and electricity. They are forbidden access to doctors, nurses, social workers, urgently needed medication, and legal representation. Water supplies were deliberately destroyed. Makeshift wells were poisoned. The Australian government claims the prisoners were relocated to new facilities in nearby town, Lorengau, however those at the site say the facilities are both still under construction and at excess capacity. Prisoners forced onto buses were turned away at the gates, left sitting out in the heat for hours with no word on when they would be allowed to enter their new makeshift prisons.

[..] Australia, the ‘innovation nation’, the country of the fair go, could not possibly entertain a system of incarceration whose cruelty wasn’t entirely by design. So anchored are they to the lie that they ‘stopped the boats’, they will let more than 620 refugees fleeing civil war and religious persecution die from starvation, malnutrition, heart-problems and disease than find them a permanent home, lest they appear soft on national security. (FYI, they haven’t stopped the boats. The government has simply stopped reporting on their arrival. I have been told by members of the defence force who work on refugee ‘intercept vessels’ of mothers whose children had died in their arms, being sent back out to sea to drift aimlessly towards… anywhere but here. The boats haven’t stopped).

New Zealand’s Labour government has already volunteered to resettle the prisoners on both Manus and Nauru but their offers have been met with vitriol, scorn and diplomatic threats. Taking responsibility for a mess of its own making is a response too compassionate for this government. It needs to be barbaric. That’s the point of deterrence. If the barbarism isn’t obviously, outrageously cruel, then the system has failed. This is Australia’s final solution: ‘Deterrence’. Robbed of even the right to their own name, the refugees languishing in detention on Manus Island were literally issued numbers that would become their formal identity and how they are referred to by the prison guards (who incidentally have a long and “well-documented history of rapes, sexual assaults, physical abuse, murders and other serious human rights abuses”, according to a report from The Age).

Almost half the breeding population of the world’s most endangered penguin species, the yellow-eyed penguin, has disappeared in one part of New Zealand and conservation groups believe commercial fishing is to blame. The yellow-eyed penguin is endemic to New Zealand’s South Island and sub-Antarctic islands, where there are just 1,600 to 1,800 left in the wild, down from nearly 7,000 in 2000. During a recent survey of the island sanctuary of Whenua Hou (Codfish Island), department of conservation staff made the alarming discovery that close to half the island’s breeding population of penguins had vanished. Elsewhere in New Zealand the bird’s population is at its lowest level in 27 years. Forest & Bird’s chief executive Kevin Hague said because the island was predator-free the evidence pointed to the animals being caught and drowned in the nets of commercial fishing trawlers.

Only 3% of commercial trawlers have independent observers on them to report bycatch deaths. “Unlike previous years where disease and high temperatures caused deaths on land, this year birds have disappeared at sea,” said Hague. “There is an active set net fishery within the penguins’ Whenua Hou foraging ground, and the indications are that nearly half the Whenua Hou hoiho population has been drowned in one or more of these nets.” Last year 24 nests were recorded on Whenua Hou, but this year rangers only found 14. Penguin numbers are declining in other parts of the South Island as well, and researchers fear the beloved bird, which appears on the New Zealand $5 note, is heading ever closer to extinction. University of Otago’s Thomas Mattern, a penguin expert, told the Otago Daily Times he believed time was running out for the birds. “Quite frankly, the yellow-eyed penguins, in my professional opinion, are on their way out,” Mattern said.

I started writing some lines as a response to my friend. Then it became a bit more. Wouldn’t you know… And then it was a whole article. So here’s my comments to it first, and then the original by someone calling themselves ‘dross22′. Now, in case I haven’t made this sufficiently abundantly clear yet, in my view Yanis’ knowledge and intellect is probably far superior to mine, and I’m a fan. But…

I don’t mean to imply that the views in the comment posted at DiEM25 are those of Yanis, but I do think it’s good to point out that these views exist within the movement. Moreover, as I wrote a few days ago, Yanis himself also thinks the EU should become ‘a federal state’. And I don’t agree with that. In fact, I think that’s a sure-fire way to absolute mayhem. Catalonia is only the latest example of why that is. Greece is an obvious other.

From that post on the DiEM25 site (see full text below):

[..] .. local European nationalism must be eradicated by creating a common European state. But a progressive European state would inevitably require a sense of identity that, in true progressive spirit, is radically opposed to religion. It would be hypocrisy to exclude Islam. Pluralism of values is a weapon of the establishment and we have to do away with it. In a Europe that is green nobody can afford pluralism in regards to lifestyle choices.

That’s quite the hand- and mouthful. Nationalism must be eradicated and religion radically opposed. Yeah, that should get you elected… You don’t want Islam in Europe, and therefore you want to do away with Christianity too. “..a sense of identity that, in true progressive spirit, is radically opposed to religion.” That’s 2000 years of often deeply ingrained history and culture out the door and down the toilet. And don’t even get me started on statues. Don’t you dare.

Look, I‘m not a religious person, but I would never want to even try to take anyone’s faith away from them. That’s the Soviet Union, China. That’s not Europe. Nor do I see what’s wrong with pluralism, seems kind of Orwellian to me. “..local European nationalism must be eradicated by creating a common European state.” Say what? Why? What kind of movement is this? That’s not thinking, that’s dogma. And not a very clever kind of it.

Pluralism (differences) is the essence and the beauty of Europe. Plus, because of its divergence in language, culture etc., forget about unifying the whole continent, if that was ever desirable. I know the author specifically narrows it down to pluralism of values and lifestyle choices, but the EU already has enough rules and laws that regulate the worst of that.

Moreover, Europe has bigger issues than ‘pluralism in lifestyle choices’. Europe is in very troubled economic times, even if the media won’t tell you that. Because of that it’s all oil on fire, pluralism, immigration, the lot. People that do have jobs have much shittier jobs (gig economy my donkey) than those who went before them. Much of the EU is mired in way over-leveraged mortgages and other household and state debt, it’s just that you wouldn’t know it to listen to politicians and media.

And that’s without mentioning bank debt, corporate debt, non-performing loans. Greece is paying the price right now for the credit casino (the house always wins) run by French/German banks. Other countries will be too in the near future. As soon as interest rates go up, there’ll be a mushroom cloud on the financial horizon. And Draghi will have emptied all his guns when it happens, saving EU banks but not EU citizens.

If by values and lifestyle you mean only that Islam should not replace Christianity in Europe, I’m your man. But that doesn’t mean Christianity should be suppressed or obliterated because of this. What you do instead is make it clear that you can be muslim, but only in as far as what it teaches does not contradict various European laws. And you actively enforce that.

[..] .. there can be no doubt that our stance on the migrants is jeopardizing our electoral prospects and our ability to influence society.. [..] This Europe will certainly not put the migrants to good use or treat them well and this will lead them to open up further to the influence of Islamic radicalism with the usual consequences.

[..] The Islamic migrants and the minorities are rather insignificant pawns that are best sacrificed as our current political situation demands. The establishment sacrifices pawns, and even rooks for its own political ends. We have to do the same.

The language is nigh unpalatable. As for (im-)migrants, it is obvious that wanting to incorporate too many of them too fast can only lead to trouble. Apart from all other discussions about values etc. After the financial crisis, it’s Europe’s main problem today. Or perhaps it’s a toss-up between finance and politics.

Perhaps what’s an even bigger issue is that what Merkel says happens, does in the EU. In economics, and in politics, and on the migration question. There is no sovereignty left. No democracy. As I’ve written before, tell the French, or Italians, that they have no say left in their own country, that Berlin controls it all. And then wait for their response. They have not a clue. Nobody told them. They sure never signed up to be ruled by Germany. But they are.

Ergo: The EU continues to exist only by the grace of media deception. And that’s an awfully thin veneer. I don’t know the ins and outs of DiEM25, but these lines make me seasick. Prediction: It’ll all fall apart at the first serious challenge and/or debate. Too many differing views from too many different locations and languages, and not nearly sufficient critical thought.

Love Yanis though. And love him for trying. But what he must have experienced is what we at the Automatic Earth did too in 2010/11/12. That is, when the Automatic Earth’s Nicole Foss spoke in numerous locations in Italy, and we’re very grateful to our friends all over the country to make it happen, we needed translators at every talk. What I mean is you can get the big ideas across, but the details will always fall by the wayside. And that is Europe.

A common European state is therefore neither desirable nor practical. The model of the European Parliament, with more translators than members of parliament, is as wrong as it is overkill. The EU is a step too far, a bridge too far. It serves a centralization dream, and the politics and economics that come with it, but it doesn’t serve the European people.

Catalunya is just one more example of that. Greece is still the main eyesore, but you just wait till Spanish tanks appear on Barcelona’s Ramblas and Brussels has nothing. Their official response is that the use of ‘Proportionate Force’ is fine, but if that’s how you label having police in full battle gear beat up grandmas, how can you condemn tanks in the streets? Where’s the dividing line?

The EU is a giant failure. Ironically, it has done a lot of good on issues like food standards -though it tends to produce far too much paperwork on everything-, but the essence is it has -predictably- fallen victim to its upper echelons’ power grabbing. EU leaders don’t give a hoot what Europeans think, the way the important posts are divided means they don’t have to. And in the end, Germany wins (old British soccer joke).

Berlin, the European Commission, the ECB, they’re actively killing the Union, democracy, and all the good that has come out of Brussels. There’s no stopping it. And then Yanis Varoufakis and DiEM25 come along and say they ‘must’ “.. eradicate local European nationalism by creating a common European state.”

Sorry boyos, wrong time, wrong place. Europe today must find a way to function without being anywhere near a common state, because it won’t have one for a long time. Focusing on that common state can only lead to the opposite: trouble, battle, even war between the different and numerous nation states.

To repeat myself once again: centralization, like globalization, only works as long as people feel they economically profit from it. In the current global and European economy, they do not, no matter what any media or politician tell you. Therefore, the focus should be on countries working together, not on becoming one state (or fiscal union, banking union). It’s not going to work, it’s going to cause major trouble, including war.

Greece may have bent over and let Berlin screw it up its donkey, but not all countries will react that way. Watch Catalonia, Hungary, Poland. And then what can Brussels do? It doesn’t have an army. Germany has a feeble one, for good reasons. NATO? The Visograd nations, Hungary etc, have different ideas about issues like immigration than Brussels and Berlin do.

How do Merkel et al plan to force them to change their ideas? Or, come to think of it, why would they want to? What Europe should be doing, but isn’t, and what a movement like DiEM25 should actively propagate, but isn’t either, is an immediate end to the deliberate creation of utter chaos in Libya, Iraq, Syria. But the European arms industry makes too much money off that chaos.

If that doesn’t stop, immigrants will keep coming. And that can only lead to more chaos in Europe too. It’s not sufficient to say you want immigration to stop. You need to take a stand against the forces that make it happen, starting with the forces in your own countries and societies (this very much includes your governments).

If you don’t focus on the basic conditions that must be fulfilled to ‘save Europe’, you will not save it. Europe is in such a crisis, or crises rather, that talking about programs and ideas from comfortable chairs is no longer a real option. Europe is very much like the orchestra on the Titanic: it keeps playing as if there is no threat ahead. And you have to tell them to stop playing. That’s your job.

Talking about what so and so would like to see by 2025 is a waste of time. But yeah, it’s comfortable, and comforting, to do it with a group of like-minded souls who fool themselves into thinking they’re smart and doing a good job. But the problem is here, now, not in 2025. And if you don’t work to solve it now, today, 2025 won’t look anything like what you have in mind.

Europeans must put a halt to European companies making billions on arms sales and oil in North Africa and the Middle East. And since these companies are protected and supported by the current leadership in Brussels and all other EU capitals, these will have to go too. That should be the focus. All the rest is the orchestra continuing to play.

Europeans don’t want a federal EU state. They don’t want to be forced to give up their national indentities, and they don’t want to lose their religions. Cue REM.

Still, Yanis has excellent ideas. As I said, I’m a fan. The way he describes his concept of parallel payment systems in the latter part of this recent video is outstanding, if you ask me. It’s the idea he never got to put into practice in Greece.

In my humble opinion the liberal way we’re approaching the refugee issue is very hard to market to the European demos. If Europe were one country and if the political climate were different, we’d have the resources to deal with the matter in the decent way we propagate. But unfortunately, Europe is currently at an advanced stage of disintegration making any discussion of a federal European state idle talk. As you all know, our mission here at DiEM is to get Europe out of the mire the establishment has got it into and then proceed to make of it a federal state. All of our very sensible and very realistic proposals take into account the fact that we’re not where we’d like to be. Yet when it comes to the refugee issue, we propagate a treatment that assumes away the current state of Europe.

Germany’s periphery and near east is divided between a collection of right-wing authoritarian states (Poland, Hungary, Ukraine etc.) and German industrial clients (Netherlands, Austria, Czech Republic, Slovakia, Slovenia, Estonia, Finland). In the Balkan South we have Brussels-Berlin protectorates (Kosovo, Montenegro, Bosnia-Herzegovina, Croatia), a debt colony and testing ground of the establishment’s policies (Greece) and states ruled by criminal syndicates (Albania, Serbia, Bulgaria). In the Romance countries (including France) we have states on the verge of fiscal breakdown, and in Germany and Brussels, the core of the establishment, we have a host of ruling incompetents that can only survive by feeding the monster they created in 2010. The feces of that monster feeds nationalistic flies and worms everywhere.

This is not a Europe that can handle the refugee issue. Indeed, all it has managed to do is let Germany bear the burden of adjustment, hence contributing significantly to AfD’s resonance in German society and forcing a desperate establishment to go as far as to bribe Turkey to stem the flow. The establishment did this hideous thing for tactical reasons and the case can be made that, in part, they owe their political survival to how they instrumentalize and adapt to the reality of xenophobia. We too have to understand quickly that racism is here to stay.

This unfortunate development is due to two things. It’s Islamist radicalism in the Mid-East and Africa, where the migrants come from, leading to terrorist activity within Europe, and a widespread plebian racism against which, given an environment where a strong left has been absent for many decades, no sufficient immune defenses exist. This is even more so in the illiberal states that succeeded the Soviet Empire. Notwithstanding their relative lack of migrants, the masses there are saturated with an almost autistic sense of nationalism.

This being the situation of the Europe we live in, there can be no doubt that our stance on the migrants is jeopardizing our electoral prospects and our ability to influence society. It’s beneficial to continue to expose the unethical deal that the establishment has with Turkey but other than that we must cease with our polemic. Instead I propose adopting a different, more sophisticated electoral strategy. We should point out that we’re not opposed to migration in principle. That in fact migration empowers, not weakens a society. But that the surrounding situation is not always the same. When European masses went to America, they were going to a place where employment was in high demand and that had familiar institutions. Today we have a Europe in the midst of an existential crisis where unemployment is high and set to rise.

This Europe will certainly not put the migrants to good use or treat them well and this will lead them to open up further to the influence of Islamic radicalism with the usual consequences. The strong patriarchalist values of the Islamic masses are a social impediment too. Even the most passionate activists must admit that those people don’t share our progressive values and breed too much, which is an ecologically unsustainable behavior. Their values can change only in a progressive environment that we don’t yet have. So what we can immediately do is subject all migrants to review and keep those with valuable skills and small families. The rest should be escorted to their countries of origin. Until Europe changes we shall enforce a moratorium on unqualified migration from those countries.

In a green Europe consumption is limited and breeding is not encouraged. Immigration from failed states, motivated (among other factors) by the desire to consume more and breed more with better safety, is undesirable. It is a liability that exposes us to the heavy ammunition from vast areas of a right-wing that, lest we forget, is stronger than we, the defeated left. In a progressive Europe, borders are internally shot down and Europeans can move and settle everywhere. But we still require European borders. There is no reason to burden ourselves with masses that are unaccustomed to the institutions of advanced societies, pose a lingering threat to our security and come with strong reactionary values. Instead of denying that fact we should point to the structural similarities of their ideology with that of the far right.

Migrants from areas within reach of the Islamist terrorist network pose a danger to our domestic security in three ways. First of all, by bringing their tribal and religious rivalries within our borders, secondly by their potential terrorist activity against European citizens and thirdly by helping our local nationalism gain ground. That local European nationalism must be eradicated by creating a common European state. But a progressive European state would inevitably require a sense of identity that, in true progressive spirit, is radically opposed to religion. It would be hypocrisy to exclude Islam. Pluralism of values is a weapon of the establishment and we have to do away with it. In a Europe that is green nobody can afford pluralism in regards to lifestyle choices. In a Europe where capital has no rights over the public, where it serves human potential and not unbridled, wasteful consumerism, there can be no pluralism.

We should give up on the migrants. I understand the sorrows of those people forced to flee their countries. But I am not willing to sacrifice the progressive future of Europe, to let bigots win and see them screw this place for good just for the sake of a small minority of people that don’t share our values and that, should the bigots win, will be subject to mass abuse anyway. The surest way to protect people with such backgrounds from the worst scenarios is to defeat the nationalist international. But this won’t be done unless we become psychologically detached from the minorities and from political correctness which are tools the establishment uses.

Let’s don’t forget that people with a migration background are vulnerable to racism too once they get comfortable. For example Turks in Germany vote en masse in favor of right-wing parties, even the AfD. I look up to people that have the remarkable courage to actively help those in need but I don’t believe this advances our movement at all. The Islamic migrants and the minorities are rather insignificant pawns that are best sacrificed as our current political situation demands. The establishment sacrifices pawns, and even rooks for its own political ends. We have to do the same.

I understand what co-founder Yanis said about the global wall and how borders divide the planet. But, in spite of their truth content, expressions such as ”borders are wounds on the face of the planet” are Soviet-era anti-colonialist slogans that today only serve to discredit those who use them. I admire someone who has the moral courage for such unorthodox opinions but these things sound crazy to the masses, especially today. There is much at stake with DiEM’s new deal and it is imperative to be more careful with our choice of words and positions. When Yanis was finance minister, he was careful not to be as open and frank as he would have been as an outsider. But he is no longer the outsider he was before 2015. None of us are. We are here to do politics and our actions and words should be subordinated to the pursuit of success in the political arena. Only success can materialize our agenda and defeat the monster of the establishment and the nationalist international.

In small states the government is closer to its citizens and by that better observable and controllable by the populace. Small states are more flexible and are better at reacting and adapting to challenges. Furthermore, there is a tendency that small states are more peaceful, because they can’t produce all goods and services by themselves and are thereby dependent on undisturbed trade.

Chief Justice Tani Cantil-Sakauye said she was gravely troubled by recent reports that federal agents were “stalking undocumented immigrants in our courthouses to make arrests,” in a letter addressed to U.S. Attorney General Jeff Sessions and Secretary of Homeland Security John Kelly. “Courthouses should not be used as bait in the necessary enforcement of our country’s immigration law,” Cantil-Sakauye wrote. Trump has vowed to increase deportations and has widened the net of illegal immigrants prioritized for detention and removal. “We will review the letter and have no further comment at this time,” Peter Carr, a spokesman for the U.S. Department of Justice, said in an email.

Immigrant rights groups say federal agents have entered courthouses with increased frequency this year, including in California, Massachusetts, Maryland and Texas, said National Immigration Law Center staff attorney Melissa Keaney. “It’s definitely an issue we’re seeing a tremendous increase in under the new administration,” Keaney said by phone on Thursday. Cantil-Sakauye stopped short of questioning the legal right of federal agents to enter courthouses to locate and detain unauthorized immigrants. Her letter said the presence of immigration agents in California courthouses could undermine “public trust and confidence in our state court system,” which serves “millions of the most vulnerable Californians.”

Washington has a knack for ignoring long-term financial shortfalls and painting overly rosy scenarios about the future to make their numbers work in the here and now. Case in point: Donald Trump’s unrealistic projection that the U.S. economy will grow at 3% this year, when the latest GDP forecasts have actually been reduced to 1.8% by a number of economists. Then there is Social Security. Many politicians are just too intimidated, uninformed or complacent to tackle the unsustainability of Social Security — which by the latest tally will see its trust fund go to zero just 17 years from now, in 2034. But while fudging GDP numbers is dangerous for America’s economic outlook and the demise of Social Security in two decades is a serious long-term concern, America faces a mathematical problem that dwarfs both of these items: A pending pension crisis that could leave millions of Americans high and dry in the very near future.

Sure, it would be difficult for many if the U.S. economy stumbles under misguided Trump policies. And yes, the idea of even modest cuts to Social Security in the coming decades could serious affect millions of seniors. But take a look South Carolina’s government pension plan, which covers roughly 550,000 people – one out of nine state residents – but is a staggering $24.1 billion in the red. This is not a distant concern, but a system already in crisis. Younger workers are being asked to do much more to support the pensions of retirees. An analysis by the The Post and Courier of Charleston noted recently that “Government workers and their employers have seen five hikes in their pension plan contributions since 2012, and there’s no end in sight.” (Most now contribute 8.66% of their pay, vs. 6.5% before the changes.) At the same time, the pension fund has been chasing more stocks and alternative investments instead of relying on stable investments like bonds that may be much less volatile but generate only meager returns.

After the surprise election of Donald Trump, the head of Norway’s biggest oil company headed to Washington D.C. this month looking for reassurance. He came away as worried as ever. “I was looking for clarity, also some guidance, good advice, and also some people to talk to – new relationships within the administration,” Statoil CEO Eldar Saetre told a conference in Oslo on Thursday. “I have to be honest with you – I didn’t get much of any of it.” Saetre, whose company has stakes in three U.S. onshore areas and in the Gulf of Mexico, was concerned about the protectionist bent of the new president’s rhetoric. Combined with last year’s Brexit vote and looming elections in Europe where nationalists are gaining influence, he sees Trump’s victory as a threat to global free trade.

“From Brexit to Trump, we see warning signs that globalization could be going in reverse,” Saetre said at the annual Swedbank Energy Summit. “For our industry, I believe that would be very negative.” Trump’s energy policies could benefit oil producers in the U.S. by loosening regulations and freeing up more areas for drilling. However, his protectionist agenda could affect economic growth and trading relations with countries from neighboring Mexico to Asia. “Global collaboration and integrated markets have been and will remain key to make our industry prosper,” Saetre said. “Fair, open access to markets are keys to enable investments, value creation and jobs in our industry.” Cross-border cooperation is also essential to solve climate change, making it “more important than ever,” Saetre said.

U.S. Treasury Secretary Steven Mnuchin said on Thursday that the Trump administration has no desire to get into trade wars, but certain trade relationships need to be re-examined to make them fairer for U.S. workers. At a news conference with German Finance Minister Wolfgang Schaeuble, Mnuchin said that President Donald Trump views trade as important for economic growth. But when asked whether the Group of 20 finance ministers should explicitly reaffirm their past vow to resist protectionism, Mnuchin repeated his view that some U.S. trade relationships need to be re-examined to make them fairer and more reciprocal. “It is not our desire to get into trade wars,” Mnuchin said. “The president does believe in free trade but he wants free and fair trade.” Differences over trade could become a sticking point for G20 finance officials at a meeting in the spa town of Baden-Baden, Germany this weekend.

Schaeuble told Reuters in an interview that it was unclear whether the anti-protectionism language would remain in the G20 statement to be issued at the meeting’s close on Saturday. Given that Trump’s “America First” agenda, trade issues could be set aside for G20 leaders to tackle at a summit in July, Schaeuble said. But both Schaeuble and Mnuchin both said they had a constructive discussion ahead of the G20 meeting and pledged to work together through differences to promote growth. “It was a good start,” Schaeuble said of the meeting, adding that it was a positive sign for international cooperation and the G20 process. “We have found a good basis to talk openly about issues where we don’t have the same stance from the outset,” Schaeuble said. Mnuchin said the ministers agreed that they should fight currency manipulation.

This viral story looks sensationalized. Meals on Wheels gets just part of its funding from the Community Development Block Grant program. I included the article anyway because we’re getting into Bizarro World territory here: “You’re only focusing on recipients of the money,” Mulvaney said. “We’re trying to focus on both the recipients of the money and the folks who give us the money in the first place. I think it’s fairly compassionate to go to them and say, ‘Look, we’re not going to ask you for your hard-earned money anymore.'”

President Donald Trump’s proposed budget, unveiled on Thursday, would cut federal funding for Meals on Wheels, a program that provides daily meals to millions of low-income seniors across the country. White House Office of Management and Budget Director Mick Mulvaney told reporters at a press conference Thursday that Meals on Wheels “sounds great.” But he said that along with other anti-poverty programs, it is “not showing any results.” “We can’t spend money on programs just because they sound good,” Mulvaney told reporters. “We’re not going to spend money on programs that cannot show that they actually deliver the promises that we’ve made to people.”

Trump’s budget would strip $3 billion from the Community Development Block Grant program, which supports a variety of community-development and anti-poverty programs. Those include Meals on Wheels, which provided 219 million meals to 2.4 million seniors in 2016. CNN reporter Jim Acosta asked Mulvaney if the funding cuts were “hard-hearted.” Mulvaney responded that reducing government spending on ineffective programs is “probably one of the most compassionate things we can do.” “You’re only focusing on half of the equation, right? You’re only focusing on recipients of the money,” Mulvaney said. “We’re trying to focus on both the recipients of the money and the folks who give us the money in the first place. I think it’s fairly compassionate to go to them and say, ‘Look, we’re not going to ask you for your hard-earned money anymore.'”

Jeroen Dijsselbloem may have to stand down as president of the Eurogroup which coordinates policy in the eurozone if he cannot retain his role as Dutch finance minister in a new coalition after his party was routed in Wednesday’s election. The Labor Party crashed from second to seventh place in preliminary results, losing more than three-quarters of its seats and making it hard for victorious liberal Prime Minister Mark Rutte to retain Dijsselbloem in such a senior cabinet post, even though he has made clear his appreciation of his work. Neither man commented on the matter directly Thursday. Dijsselbloem is due to represent the Eurogroup at a G20 meeting in Germany Friday and to chair the monthly meeting of the 19 eurozone finance ministers in Brussels on Monday.

While other eurozone finance ministers may seek his role, there is a lack of obvious contenders, particularly given that many governments will resist appointing a politician from the right because conservatives hold most other top EU jobs. It is just possible Dijsselbloem might retain his Dutch portfolio. There has also been speculation that the Eurogroup could keep him on as chairman even if he loses his national job – although some senior officials say that is most unlikely. Dijsselbloem, whose second 30-month term ends in January, has been popular with fellow ministers, balancing a background on the left with support from conservative Wolfgang Schaeuble, who wields Germany’s power on the Eurogroup and insists on strict terms for Greece and other states awarded bailout loans.

The Dutchman will remain in office for weeks, and possibly months, as Rutte struggles to put together a new coalition after Wednesday’s election. Rutte’s own party lost seats and the anti-immigration party of Geert Wilders finished in second place. Eurogroup rules do not stipulate that its president must be a serving finance minister. But senior eurozone officials have said lately that they do not believe fellow ministers would keep Dijsselbloem on if he lost his main job in The Hague. In the longer term, there has been talk of making the position a full-time one, with its own staff. But that is not yet agreed.

Anyone who doubted that the IMF is in deep trouble over its inane involvement in the toxic Greek bailout, and Berlin’s policy of extending Greece’s insolvency ad infinitum while the country’s social economy shrinks, should now have no more doubts. Congressman Bill Huizenga (R-MI), a senior member of the House Financial Services Committee, yesterday introduced the IMF Reform and Integrity Act, which would require the U.S. to oppose the International Monetary Fund’s (IMF) co-financing of a third Greek bailout with the European Stability Mechanism. If such co-financing were to go forward, the bill would prohibit the U.S. from supporting an IMF quota increase until funds are repaid in full.

“The IMF is supposed to be a lender of last resort, not a fig leaf of first resort for Eurozone members,” said Congressman Huizenga. “The IMF isn’t a fund to rescue political parties in creditor nations, nor should it be a junior partner to outside organizations that lack the commitment to do their work. For seven years now, the IMF has been used to shield Eurozone officials from their voters, which has tarnished the Fund’s reputation, prolonged Greece’s misery, and put off hard choices about Europe’s future that must be made regardless. As the IMF’s largest shareholder, the U.S. should ensure that the Fund remains independent and free from politicization that could put taxpayer dollars at risk. This bill will help make that a reality.”

In addition, the IMF Reform and Integrity Act cancels supplementary IMF funds that have already been deactivated, rescinding them and sending those resources back to the U.S. Treasury. The bill also clarifies existing law to require the U.S. Executive Director of the Fund to oppose any loan to a country whose debt is unsustainable.

Senator Mike Lee (R-UT) and a group of his colleagues are calling on the newly appointed Secretary of State Rex Tillerson to immediately investigate how US taxpayer funds are being used by the State Department and the United States Agency for International Development (USAID) to support Soros-backed, leftist political groups in several Eastern European countries including Macedonia and Albania. According to the letter, potentially millions of taxpayer dollars are being funneled through USAID to Soros’ Open Society Foundations with the explicit goal of pushing his progressive agenda. “Unfortunately, we have received a credible report that, over the past few years, the U.S. Mission there has actively intervened in the party politics of Macedonia, as well as in the shaping of its media environment and civil society, often favoring left-leaning political group over others. We find these reports discoraging and, if true, highly problematic.”

“Much of the concerning activity in Macedonia has been perpetuated through USAID funds awarded to implementing entities such as George Soros’ Open Society Foundations. As the recipient of multiple grant awards and serving as a USAID contractor implementing projects in this small nation of 2.1 million people, our taxpayer funded foreign aid goes far, allowing Foundation Open Society – Macedonia (FOSM) to push a progressive agenda and invigorate the political left. Our foreign aid should only be used to promote a political agenda if it is in the security or economic interests of our country to do so, and even at that, we must be cautious and respectful in such an endeavor. We should be especially wary of promoting policies that remain controversial even in our own country and that have the potential to harm our relationship with the citizens of recipient countries.”

As Fox News pointed out, USAID gave nearly $15 million to Soros’ Foundation Open Society – Macedonia, and other Soros-linked organizations in the region, in the last 4 years of Obama’s presidency alone. “The USAID website shows that between 2012 and 2016, USAID gave almost $5 million in taxpayer cash to FOSM for “The Civil Society Project,” which “aims to empower Macedonian citizens to hold government accountable.” USAID’s website links to www.soros.org.mk, and says the project trained hundreds of young Macedonians “in youth activism and the use of new media instruments.” The State Department told lawmakers that in addition to that project, USAID has recently funded a new Civic Engagement Project which partners with four organizations, including FOSM. The cost is believed to be around $9.5 million. A citizen’s initiative called “Stop Operation Soros” has also published a white paper alleging U.S. money has been funding violent riots in the streets [..]

China may avoid having to pull out the big stick when it comes to reining in a record short-term borrowing spree by its smaller banks. The increased cost to lenders of issuing so-called negotiable certificates of deposit will naturally deflate a market that jumped by 90% in February from a year earlier, according to Ping An Securities. Demand is also waning for the securities, used by Chinese banks as a way of leveraging up investments and expanding their balance sheets, with mutual funds cutting their holdings to the lowest level in at least a year in January. “It’s unsustainable for commercial banks to take such high costs,” said Shi Lei at Ping An, a unit of China’s second-largest insurer. “NCDs are now even more expensive than short-term commercial paper. It will be corrected as lenders complete their adjustments in the term structure of the debt.”

Introduced by the People’s Bank of China in 2013 as a fresh source of money for smaller lenders which have difficulty competing for savings against big state banks, NCDs have morphed into a way for them to fund purchases of each other’s wealth-management products. That boosts refinancing risks in a banking system that will see a record 3.65 trillion yuan ($529 billion) of the notes maturing this quarter. This hasn’t escaped the attention of the authorities, with the PBOC looking at classifying NCDs as interbank liabilities, Caixin.com reported in January, a move that would quell growth in the market given limits on how much in interbank debt Chinese lenders are allowed to hold relative to their overall liabilities. The central bank has been ramping up its campaign to contain leverage since August, tightening money-market rates as a way of discouraging borrowing. The PBOC boosted borrowing costs for lenders Thursday, just hours after the Federal Reserve lifted benchmark interest rates.

On 10 January 2017 Canadian PM Justin Trudeau fired his minister of external affairs, Stéphane Dion, and replaced him with Chrystia Freeland, who was then minister of international trade. This cabinet shuffle might not have gotten much public notice except that Dion is a distinguished parliamentarian, former leader of the party and leader of the opposition, and a former key minister in the Liberal government of Jean Chrétien. Freeland, on the other hand, is a well-known Ukrainian ultra-nationalist and self-declared Russophobe and hater of Russian President Vladimir Putin. The sacking of Dion was also noteworthy because Trudeau had run on an electoral platform in 2015 promising, inter alia, to improve Canadian relations with Russia, spoilt by the Conservative government of Stephen Harper. When Dion became minister of external affairs, he confirmed the Liberal commitment to re-establish more constructive Canadian-Russian relations.

[..] Why should Canadians care one way or another whether their government supports the Ukraine and sends arms and advisors there to strengthen Ukrainian military forces? Well, the most important reason is that the present government in Kiev is illegitimate in spite of democratic appearances. It is the spawn of a violent coup d’état in February 2014, brokered and supported by the United States and the European Union, which overthrew the democratically elected president Viktor Yanukovich. The vanguard of the Kiev coup d’état are neo-Nazi, fascist or ultra nationalist political and paramilitary organisations, notably the political party Svoboda, the paramilitary Pravyi sektor and various other paramilitary forces such as the so-called Azov and Aidar battalions. These paramilitary units were and are used to crush opposition in those parts of the Ukraine controlled by Kiev.

Neo-Nazi violence and intimidation worked in many places, but not in others. In the Crimea, the population united almost to the last man and woman, to toss out the putschist authorities and to vote for reunification with Russia. In the east, in the Donbass, the anti-fascist resistance repulsed Kiev punitive forces with heavy losses. These remarkable feats of arms, redolent of so many others in Russian history, were wasted by Moscow, which disregarded a first principle of war that one never lets an enemy withdraw to fight another day. «He who spares the aggressor», Stalin once remarked, «wants another war.» It may shock some people to hear Stalin quoted, but Plutarch, Sun Tzu, or Clausewitz might have said the same thing. Moscow supported the so-called Minsk peace accords which were never respected by the Kiev authorities. Ultra-nationalists even boasted that they had agreed to Minsk solely in order to rest and refit their beaten forces. It was only a ruse de guerre.

These are the forces which the Canadian government now supports with the enthusiastic backing of Minister Freeland. For her, it must be a lifelong dream-come-true. There has been much press comment during the last week or so about Freeland’s Ukrainian grandfather, Mykhailo Chomiak, a Nazi collaborator during World War II. Freeland claimed that he was only a refugee from Stalinist violence. He might have been, but he also collaborated with Nazi Germany. In many places in Europe, France and Italy, for example, collaborators were summarily shot or imprisoned after the war. In France, more than 5,000 were executed including Pierre Laval, a prominent French politician, who sided with Nazi Germany and vaunted collaboration to oppose the USSR. Another 38,000 French collaborators were jailed. Chomiak was lucky he was not hanged and that he ended up in northern Alberta, to die a well-to-do farmer.

The National Health System (ESY) is on the the brink of collapse, according to the Panhellenic Medical Association (PIS), which cited chronic shortages in staff and equipment at public hospitals around the country due to limited finances, and disruptions in the primary healthcare system. The association added that the only reason the health system is still running is due to the efforts of existing staff, whose endurance levels, however, are being put to the test. “The average age of ESY doctors is 60. And these people will be leaving in a few years,” said PIS president Michail Vlastarakos, adding that public hospitals need 6,500 additional permanent medical staff.

There was a 339% increase of in the number of first-time asylum applicants in Greece in 2016, which rose to 49,875 in 2016 from 11,370 in 2015, according to figures released by Eurostat on Thursday. On the basis of these figures, Greece ranks second among EU countries for the total number of asylum applications filed in relation to its population. Germany is first with 8,789 applications per million population, followed by Greece with 4,525 applications per million population. Third is Austria with 4,587, followed by Malta (3,989), Luxembourg (3,582) and Cyprus (3,350). The number of new asylum applicants on an EU level dropped to 1.204 million in 2016, for a percentage change of -4%, but were more than double the number of applicants in 2014. Most asylum applicants in EU member-states were Syrians (28%), Afghans (15%) and Iraqis (11%). In Greece, Syrians accounted for more than half of asylum applicants (53%), Iraqis for 10% and Pakistanis 9%.

Greece is being used as a testing ground for degrading asylum policies that fall short of the democratic values Europe would normally uphold, say refugee groups marking the first anniversary of a deal designed to slow arrivals to the continent. The accord struck last year between Turkey and the EU has been praised in some quarters for having slowed arrivals into Europe and reduced deaths in the Aegean sea. But basic human rights were lost in the process, the organisations claim. “Greece has become a testing ground for policies that are eroding international protection standards,” said the Norwegian Refugee Council, International Rescue Committee and Oxfam, in a joint report based on extensive fieldwork on Aegean islands where more than 14,000 men, women and children are trapped in abysmal conditions.

“Over the course of the year, there have been deaths, suicide attempts, people engaging in self harm, and children, women and men exposed to abuse and sexual violence.” The withering assessment, coming almost 12 months to the day since the agreement was reached between Ankara and Brussels, is in stark contrast to the official view of an accord hailed by the EU, at the time, as a breakthrough in the migration crisis. Agreed in exchange for €6bn in refugee aid to Ankara, it was seen as a vital step in resolving a crisis that at its height threatened to tear the bloc apart. Since its implementation, the number of refugees and migrants going to Europe via Turkey has dropped dramatically.

Islands such as Lesbos, which is near Turkey, are reporting 100 arrivals or fewer a day, while in 2015, when more than 1 million people streamed into Europe, it received 10,000 men, women and children over one weekend. But NGOs say the reality on the ground is that the deal has prolonged and exacerbated human suffering. The report found that, incarcerated on Greek islands, asylum seekers had been made to live in substandard and overcrowded conditions for months on end. With limited access to fair and effective asylum procedures they were subject to “a convoluted and constantly changing process” that lacked oversights and checks and balances. Often legal experts were unable to keep track of a system that was impossible for people to navigate alone.

A separate report by Save the Children and Médecins Sans Frontières warned that there were worrying levels of mental health problems among migrants and refugees in the Greek camps. It said people including children as young as nine were cutting themselves, attempting suicide and using drugs to cope with the “endless misery”. Mental health was “rapidly deteriorating due to the conditions created as a result of this deal”, Save the Children said. [..] The report expressed the NGOs’ fears that the deal would become a blueprint for crises elsewhere. “Beyond the deeply concerning situation in Greece, the EU is looking to replicate this model elsewhere, and, in so doing, risks setting a dangerous precedent for the rest of the world,” said the report.

Desperate refugees trapped in Greece are self-harming and attempting suicide as a result of “disastrous” EU policies, aid agencies have warned. More refugees are dying than ever before while attempting to reach Europe, almost a year after a controversial deal was struck with Turkey in an effort to prevent boat crossings across the Aegean Sea. The agreement has stranded thousands of asylum seekers in Greece, where aid agencies say children are among rising numbers of migrants trying to kill themselves after months trapped in squalid camps. Research by Save the Children found more than 5,000 minors are living in “appalling conditions” that are driving a mounting mental health crisis. It has recorded children as young as nine self-harming and 12-year-olds attempting suicide, sometimes filming themselves in the act, as well as a spike in drug and alcohol abuse by teenagers who are exploited by dealers in camps.

Violent protests and deaths are traumatising the youngest and most vulnerable refugees, whose families say they are too scared to let their children play out of sight in case they are hurt or abused. Save the Children staff report that some unaccompanied children live in “24-hour survival mode” and sleep in shifts to try to stay safe, while others disappear or pay smugglers to leave the Greek islands. “The EU-Turkey deal was meant to end the flow of ‘irregular migrants’ to Greece, but at what cost?” said Andreas Ring, Save the Children’s humanitarian representative. “Many of these children have escaped war and conflict only to end up in camps many of them call ‘hell’ and where they say they are made to feel more like animals than humans.” Since 20 March 2016, all migrants arriving on Greek islands have been held, under threat of deportation to Turkey, while their asylum applications are processed, but legal blocks have slowed transfers and left refugees in overcrowded tent camps for up to a year.

Chinese dissident artist Ai Weiwei on Thursday slammed “shameful” politicians who ignore refugees as he launched a giant art installation centered on their fate at the National Gallery in Prague. Called “Law of the Journey”, the show features a 70-metre-long (230-foot-long) inflatable boat with 258 oversize refugee figures. A tribute to the thousands who have drowned crossing the Mediterranean, the piece is Ai’s biggest-ever installation. It will be on display until the end of the year. “My message is very clear: being a politician or a political group, you cannot be so short-sighted, you cannot have no vision, you cannot sacrifice human dignity and human rights for political gain,” Ai told AFP. “I think this is very, very shameful behaviour,” he added.

The Czech Republic and the other post-Communist central European members have rejected EU plans to allow Muslim refugees on their territories throughout the migrant crisis. Immigration from Muslim countries has become a hot political topic in these states, although most refugees have opted for wealthier western countries like Germany or Sweden. “If we see somebody who has been victimised by war or desperately trying to find a peaceful place, if we don’t accept those people, the real challenge and the real crisis is not of all the people who feel the pain but rather for the people who ignore to recognise it or pretend that it doesn’t exist,” said Ai. “That is both a tragedy and a crime,” said the 59-year-old painter, sculptor and photographer. Ai spent the last year visiting such migrant and refugee hotspots as the US-Mexican border badlands to the Turkish-Syrian frontier and crowded holding camps on Greek islands.

President Trump’s temporary ban on immigration from seven Muslim-majority nations — Iran, Iraq, Libya, Somalia, Syria, Sudan, and Yemen — is big news right now. And its effects are being felt widely throughout the worlds of science and medicine. Observing the fervid debate as someone who has recently had firsthand experience with the immigration system, I was interested in seeing as much of the larger immigration trends as government data permitted. In the interactive data visualization below, each country or region of last residence is represented by color, in a stream whose thickness represents the number of people arriving from that area in a given year. Immediately, two things stand out: boom and bust in the immigration rate (it’s easy to assume that it has always been increasing) and the new diversity of immigrants after World War II.

Immigration collapsed after the 1924 Immigration Act, which restricted entrants from Southern and Eastern Europe, severely limited African immigration, and prohibited it from East Asia, India, and the Arab world. The Immigration and Nationality Act of 1965, which removed national origins quotas imposed by the 1924 act, led to the diversity of the immigrant population that we see to this day. That diversity is reflected in the data visualization in the flowering of a completely new range of colors directly after the act was passed. Regardless of the political moves ahead, nearly 200 years of immigration suggests that no one leader or piece of legislation is capable of staunching the diverse flow of immigrants to the US.

The x axis displays years, the y axis displays the number of immigrants (in millions), and each country or region of last residence is represented by its own color and stream whose thickness represents the number of people from that area becoming legal permanent residents in a given year.

Donald Trump has blasted as ‘dumb’ a refugee deal between Australia and the United States, but Prime Minister Malcolm Turnbull is confident the president won’t backflip on their agreement. An explosive tweet from Mr Trump has once again cast doubt on the deal, in which the US would take refugees currently held on Manus Island and Nauru in return for Australia accepting refugees from Central America. ‘Do you believe it? The Obama Administration agreed to take thousands of illegal immigrants from Australia. Why? I will study this dumb deal!’ the US president tweeted on Thursday. Mr Turnbull said despite the president’s tweet, he had received multiple assurances from Mr Trump, his press secretary and the US embassy the deal would be progressed. ‘This is not a deal that he would’ve done or that he would regard as a good deal,’ Mr Turnbull told Fairfax radio. ‘But the question is, will he commit to honour the deal? And he has given that commitment.’

The prime minister wouldn’t tell Sydney radio Macquarie Radio whether Mr Trump had labelled the deal dumb or otherwise in their phone conversation on Sunday, but has denied reports the call ended abruptly or in anger. ‘I want to make one observation about it, the report the president hung up is not correct, the call ended courteously,’ he said. The US president reportedly told Mr Turnbull he was ‘going to get killed’ politically and accused Australia of seeking to export the ‘next Boston bombers’, according to senior US officials quoted by The Washington Post. Mr Turnbull said the deal with the former president was always for the Americans to use their own vetting processes and determine how many of the people on Nauru and Manus Island would be resettled. ‘It wasn’t a commitment to take everybody sight unseen,’ he said. ‘It is possible they could take a smaller number or a larger number – it will depend on the assessments.’

Jason Burack : It seems that globalism may be on the retreat. What’s your opinion about that, in light of Brexit, Donald Trump winning, and the Italian referendum failing? Nick Giambruno : I think you’re right, Jason. Right now globalism is on the decline. But let’s define “globalism” before I explain why. This word gets thrown around a lot. But most people don’t really know what it means. It’s very simple. Globalism is the centralization of power into a couple of global institutions: the EU, the United Nations, the IMF, the World Bank, NAFTA, NATO, and so on. It’s really just a polite way of describing world government, or what George H.W. Bush termed the New World Order. I think globalism and the centralization of power is always a bad thing. People who value individual freedom and economic freedom… really, freedom in general, should oppose it. It’s an interesting moment in history. Those three things you just mentioned—Brexit, Trump, and the failure of the Italian referendum—are clear signs that globalism is losing steam. Whether it’s a sort of one step back, two steps forward thing or the ideology of globalism is really on its way out remains to be seen.

[..] Italy hasn’t had any real economic growth since it joined the euro in 1999. That’s pretty profound. The Italian economy is in the same place it was 17 years ago. A lot of that is because the euro makes Italy uncompetitive with countries like Germany. The next Italian government could be a coalition of anti-EU populist parties. If that happens, there’s an excellent chance Italy could leave the euro. Keep in mind that Italy is a core member of the euro. If it leaves, France would probably leave, too. And if that happens, the euro is finished.

Jason : Without the euro, what’s left holding the EU together? Nick Giambruno : Almost nothing. The euro is the main glue. Without it, the whole EU could unravel. We’re still early in the process. But it doesn’t look good for the globalists and the Eurocrats. I think historians will look back at the failure of the December 4 Italian referendum as a crucial tipping point. With globalism failing, I’m not sure what happens next. No one does. We could see a rise of nationalism, which wouldn’t be a good thing. Or political power could diffuse even further, which would be a better outcome. Decentralization is good for individual and economic freedom.

American President Donald Trump’s travel ban initially looked to block more than 100,000 German dual citizens from entering the US, but now the two allies say they have found a solution. Acting commissioner of US Customs and Border Protection, Kevin McAleenan, said on Tuesday that travelers would be evaluated based on the passport they present rather than their dual citizen status, even if they have citizenship in one of the seven predominantly Muslim countries with temporary blocks. This was the first clarification about what the bans mean for people with dual citizenship, after US embassies, including Berlin’s, issued statements indicating that dual citizens were included in the bans.

The update on Tuesday means that people who are citizens of one of the seven countries as well as another country not named in the ban will be able to enter the US. EU migration commissioner Dimitris Avramopoulos explained that this applies to people with European citizenship. “[I am] glad that issue of EU dual nationals is resolved,” Avramopoulos wrote on Twitter. Trump’s executive order issued on Friday suspends all refugee admissions into the United States for 120 days, bars all Syrians indefinitely, and blocks citizens of seven mostly Muslim countries for 90 days. German politicians were concerned about what it would mean for the more than 130,000 dual citizens, including the Green party’s German-Iranian representative Omid Nouripour, who is the vice chair of a German-American parliamentary group.

Germany’s current account surplus is expected to have hit a new record of $297 billion in 2016, overtaking that of China again to become the world’s largest, the Munich-based Ifo economic institute said on Monday. This would be equivalent to 8.6% of total output, which means it would once again breach the European Commission’s recommended upper threshold of 6%. In 2015 the current account surplus stood at $271 billion. The European Commission and the United States have urged Germany to lift domestic demand and imports to help reduce global economic imbalances and fuel global growth, including within the euro zone. Germany rejects such criticism, saying it already lifted domestic demand by introducing a national minimum wage in 2015 and agreeing on a strong hike in pension entitlements in 2016. In addition, the government has increased state spending on roads, digital infrastructure and asylum seekers while sticking to its goal of keeping a balanced budget.

Asked about Ifo’s estimate, a spokeswoman for the economy ministry said the government views the surplus as high but the imbalance was not excessive. “The federal government shares the view of the European Commission that the German current account surplus has to be assessed as high – but it doesn’t represent an excessive imbalance,” spokeswoman Tanja Alemany Sanchez de Leon said. She added that Germany’s current account surplus with other euro zone countries halved to some 2% of GDP in 2015 from roughly 4% in 2007. “That shows there is a reduction of trade imbalances within the euro zone,” the spokeswoman said, adding that 44% of Germany’s current account surplus was due to business relations with the United States and Britain. Ifo estimated China’s current account surplus at $245 billion last year due to weaker exports. By contrast, the United States is predicted to have the world’s largest capital imports, with a deficit of $478 billion for 2016, Ifo said.

Switzerland’s exports to the U.S. surged last year to a record high, pushing the trade surplus higher and putting the Alpine export powerhouse in a potentially uncomfortable position amid rising protectionist sentiment in the U.S. The figures come alongside heightened attention brought by President Donald Trump to bilateral trade balances and the policies countries have pursued to weaken their currencies against the dollar to gain a competitive edge. Switzerland has largely escaped much focus in the U.S. and is unlikely to be in the new administration’s crosshairs now, given its relatively small size. Still, its swelling surplus, and the Swiss National Bank’s multiyear efforts to weaken the franc, could at a minimum raise questions as to why the U.S. may treat some countries like China and Mexico more harshly than others down the road when it comes to trade.

Switzerland’s overall trade surplus was 37.5 billion Swiss francs ($37.6 billion) last year, the country’s customs office said Thursday, up one billion francs from 2015 and an all-time high. Nearly half of that surplus—17.2 billion francs—came from the U.S., as Swiss exports there jumped 15% to 31.5 billion francs. Switzerland ran smaller trade surpluses with Japan and the Middle East, while it had trade deficits with Germany and China. “Looking forward if this is truly Donald Trump’s agenda to level the playing field, Switzerland has to be on that list,” said Peter Rosenstreich at Swissquote Bank. [..] Switzerland’s current account surplus was 9% of GDP in 2016, according to IMF estimates, well above the 3%-of-GDP level the Treasury considers material. Meanwhile, Switzerland has in recent years engaged in one-way interventions to weaken the franc, thereby making Swiss exports more competitive in world markets. The Swiss National Bank has for years said the franc was significantly overvalued.

Dutch authorities will count by hand all the votes cast in next month’s general elections, ditching “vulnerable” computer software to thwart any cyber hacking bid, a senior minister has said. “I cannot rule out that state actors may try to benefit from influencing political decisions and public opinion in the Netherlands,” interior minister Ronald Plasterk said in a letter to parliament on Wednesday. On 15 March, the Netherlands kicks off a year of crucial elections in Europe which will be closely watched amid the rise of far-right and populist parties on the continent. Dutch officials are already on alert for signs of possible cyber hacking following allegations by US intelligence agencies that Russia may have meddled in November’s US presidential polls to help secure Donald Trump’s victory.

Plasterk told parliament that fears over “the vulnerabilities of the software” used by the country’s election committee “had raised questions about whether the upcoming elections could be manipulated”. He insisted in a letter to MPs that “no shadow of a doubt should hang over the results” of the parliamentary polls, which some analysts predict could result in a five-party coalition. Therefore the interior ministry and the election committee had decided “to calculate the results based on a manual count”. Plasterk told broadcaster RTL that possible external actors included Russia. “Now there are indications that Russians could be interested, for the following elections we must fall back on good old pen and paper,” he said.

[..] perhaps there just aren’t that many jobs going across the border. Certainly not enough to occupy all the Mexicans looking for work. Yet we know significant numbers of jobs HAVE relocated to Mexico: employment in automobile manufacture, for example, has quadrupled since 1994. Clearly something is very wrong. The figures just don’t make sense. Jobs have gone from the U.S. to Mexico, but people continue to migrate from Mexico to the US in search of work, though the rate has slowed dramatically in recent years. In fact Mexico has become somewhat dependent on its migrants: it now receives more foreign currency from migrant remittances than it does from exports of crude oil. This is mainly because of falling oil prices and production since 2014. But it also reflects a distorted and unhealthy economic relationship between Mexico and the U.S.

The truth is that NAFTA has been a rotten deal, not for the U.S. but for Mexico. Firstly, NAFTA did not establish a level playing field for agricultural production. It ended tariffs, but not subsidies. Mexico opened its borders to American agricultural exports, particularly corn. But America continued to subsidize the production of corn: between 1995-2014, corn subsidies totaled nearly $95bn. Coupled with America’s higher productivity, the subsidies made it impossible for Mexican farmers to compete. Agricultural employment dropped 19% between 1994 and 2007, a loss of about 2 million jobs, mostly in family farms. There was a corresponding increase in seasonal work, as agricultural production shifted to fruit and vegetable production, so the unemployment figures perhaps did not rise as much as might have been expected.

But Americans mourning the loss of steady well-paid manufacturing jobs surely should be the first to appreciate that seasonal work is no substitute for steady family farm employment. Unsurprisingly, Mexicans headed for the border. Between 1994 and 2000, emigration to the U.S. rose by 79%, though it slowed somewhat due to recession and increased border security after the 9/11 attacks. Secondly, NAFTA has rendered the Mexican economy entirely dependent on the U.S. Over 80% of Mexico’s exports go to the U.S., and about half of its imports come from there. Mexico is deeply integrated in U.S. supply chains, particularly manufacturing production. The IMF observes that Mexican and American industrial production are co-integrated and follow a common cycle. Increases in American economic output are transmitted one-for-one to Mexican output.

[..] Mexico is thus highly sensitive to changes in US policy and unable to protect itself from U.S.-generated economic shocks: the 2008 financial crisis in the US caused a shock to trade which knocked 6% out of the Mexican economy in 2009, though it bounced back quickly. Any attempt by the U.S. to decouple itself from Mexico through trade tariffs and impediments to financial flows would be likely to have a dramatic impact on the Mexican economy. This toxic dependence is to a large extent caused by NAFTA. Indeed, we might say that it was NAFTA’s primary purpose. And it unquestionably benefits the U.S. more than Mexico. Any small supplier to a giant corporation could tell you that being completely dependent on a single buyer is not a good situation. Diversification is strength. This is true for countries as much as businesses. By discouraging diversification, NAFTA has done Mexico no favors.

President Trump says he wants the US to have better relations with Russia and to halt military operations against Muslim countries. But he is being undermined by the Pentagon. The commander of US forces in Europe, General Ben Hodges, has lined up tanks on Poland’s border with Russia and fired salvos that the general says are a message to Russia, not a training exercise. How is Trump going to normalize relations with Russia when the commander of US forces in Europe is threatening Russia with words and deeds? The Pentagon has also sent armored vehicles to “moderate rebels” in Syria, according to Penagon spokesman Col. John Dorrian. Unable to prevent Russia and Syria from winning the war against ISIS, the Pentagon is busy at work derailing the peace negotiations.

The military/security complex is using its puppets-on-a-string in the House and Senate to generate renewed conflict with Iran and to continue threats against China. Clearly, Trump is not in control of the most important part of his agenda—peace with the thermo-nuclear powers and cessation of interference in the affairs of other countries. Trump cannot simultaneously make peace with Russia and make war on Iran and China. The Russian government is not stupid. It will not sell out China and Iran for a deal with the West. Iran is a buffer against jihadism spilling into Muslim populations in the Russian Federation. China is Russia’s most important military and economic strategic ally against a renewal of US hostility toward Russia by Trump’s successor, assuming Trump succeeds in reducing US/Russian tensions.

The neoconservatives with their agenda of US world hegemony and their alliance with the military-security complex will outlast the Trump administration. Moreover, China is rising, while the corrupt and dehumanized West is failing. A deal with the West is worth nothing. Countries that make deals with the West are exposed to financial and political exploitation. They become vassals. There are no exceptions. Russia’s desire to be part of the West is perplexing. Russia should build its security on relations with China and Asia, and let the West, desirous of participating in this success, come to Russia to ask for a deal. Why be a supplicant when you can be the decider?

A group of U.S. military veterans has vowed to block completion of the hotly disputed Dakota Access pipeline, despite the secretary of the Army giving the project the green light. “We are committed to the people of Standing Rock, we are committed to nonviolence, and we will do everything within our power to ensure that the environment and human life are respected. That pipeline will not get completed. Not on our watch,” said Anthony Diggs, a spokesman for Veterans Stand. Diggs added that the group hopes to raise enough funds “to have a larger, solid boots-on-the-ground presence.” The secretary of the Army instructed the U.S. Army Corps of Engineers to grant Energy Transfer Partners the easement it needs to complete the final stretch of its $3.7 billion pipeline, Sen. John Hoeven and Rep. Kevin Cramer, both of North Dakota, said Tuesday.

President Donald Trump last week signed executive actions to advance construction for Dakota Access and another disputed pipeline. Veterans Stand has raised $37,000 since launching a GoFundMe campaign last week. Part of that money will go to “basic transport of supplies and personnel,” Diggs told CNBC. The Standing Rock Sioux tribe also on Tuesday vowed to mount a legal challenge claiming the Corps lacks the statutory authority to stop an environment review and issue the easement. The tribe opposes construction, saying the pipeline passes beneath a source for its drinking water and construction would disrupt sacred land. Their campaign has drawn thousands of protesters to camps near Cannon Ball, North Dakota, in recent months. To abandon the study “would amount to a wholly unexplained and arbitrary change based on the president’s personal views and, potentially, personal investments,” the tribe said in a statement.

It’s difficult to argue that the secretary of the Army lacks the authority to grant the easement, said Bruce Huber, an associate professor of law at the University of Notre Dame who specializes in environmental law. However, any halt to the environmental study will face a high burden proof, he said. That’s because the Army’s assistant secretary for civil works is on the record as saying other routes should be explored and an environmental study is the best way to do that. In December, the Corps denied the easement and said the best path forward would be to consider alternative routes for the project by conducting an environmental review with public input and analysis. “That’s an unclear bit of law there, whether the process can simply be terminated,” Huber said. “You can bet your bottom dollar it will be litigated.”

Greece intercepted 138 incursions into its air space by Turkish air forces on Wednesday (1 February) amid mounting tensions between the neighbouring countries. The unusually high number of incursions took place over islands in the central and southern Aegean and were condemned by Greek Defence Minister Panos Kammenos as reckless. “We want peace, we are not looking for a fight or for trouble in the Aegean, but there won’t be an aircraft which will not be intercepted,” Reuters quoted him as saying. Long-time regional rivals – notably over Cyprus – Greece and Turkey almost went to war in 1996 over two islets, Imia and Kardak, situated west of Bodrum and north of Kos in the Aegean Sea. On Wednesday (Feb 1) Kammenos flew over the area and threw a wreath in the sea to commemorate the death of three Greek officers in a helicopter crash in the 1996 incident.

The gesture followed Turkish military chiefs paying respects on Sunday (Jan 29). During the incident, a Turkish admiral reportedly refused to sink Greek ships. This time however a senior Turkish politician warned Turkey would respond with force if Greece started “playing games” over the disputed islets. According to Hurriyet, Justice and Development (AKP) Izmir deputy Hüseyin Kocabıyık warned: “I am warning Greece: You were saved owing to a cowardly [Turkish] admiral in 1996. Do not play the Kardak game with us. We will shoot you!”. The two countries are also at loggerheads over an asylum claim by eight Turkish military officers accused of involvement in the attempted coup in July 2016. A Greek court has blocked the extradition of the men back to Turkey, with Supreme Court judge Giorgos Sakkas ruling on Thursday (26 January) that they would not receive a fair trial in their homeland.

Six people were killed and eight wounded when gunmen opened fire at a Quebec City mosque during Sunday night prayers, in what Canadian Prime Minister Justin Trudeau called a “terrorist attack on Muslims”. Police said two suspects had been arrested, but gave no details about them or what prompted the attack. Initially, the mosque president said five people were killed and a witness said up to three gunmen had fired on about 40 people inside the Quebec City Islamic Cultural Centre. Police said only two people were involved in the attack. “Six people are confirmed dead – they range in age from 35 to about 70,” Quebec provincial police spokeswoman Christine Coulombe told reporters, adding eight people were wounded and 39 were unharmed.

The mosque’s president, Mohamed Yangui, who was not inside when the shooting occurred, said he got frantic calls from people at evening prayers. “Why is this happening here? This is barbaric,” he said. Prime Minister Justin Trudeau said in a statement: “We condemn this terrorist attack on Muslims in a center of worship and refuge”. “Muslim-Canadians are an important part of our national fabric, and these senseless acts have no place in our communities, cities and country.” The shooting came on the weekend that Trudeau said Canada would welcome refugees, after U.S. President Donald Trump suspended the U.S. refugee program and temporarily barred citizens from seven Muslim-majority countries from entering the United States on national security grounds.

A Canadian federal Liberal legislator, Greg Fergus, tweeted: “This is an act of terrorism – the result of years of sermonizing Muslims. Words matter and hateful speeches have consequences!” The premier of Quebec province, Philippe Couillard, said security would be increased at mosques in Quebec City and Montreal. “We are with you. You are home,” Couillard said, directing his comments at the province’s Muslim community. “You are welcome in your home. We are all Quebecers. We must continue together to build an open welcoming and peaceful society”.

Canada will offer temporary residency to any travelers stranded by U.S. President Donald Trump’s orders temporarily barring people from seven Muslim-majority countries, a senior official said on Sunday. Immigration Minister Ahmed Hussen told a news conference he did not know how many people might be eligible but said only a handful of passengers headed to the United States from Canada had been denied boarding. Trump’s decision on Friday, which also affects refugees, left many people uncertain of whether they could enter the United States. “Let me assure those who may be stranded in Canada that I will use my authority as minister to provide them with temporary residency if they need it,” Hussen said.

Liberal Prime Minister Justin Trudeau’s government has refrained from criticizing the United States, which takes 75% of Canadian exports, preferring instead to stress Canada is open to refugees. “Every country has the right to determine their policies,” said Hussen. The Canadian Council for Refugees and the Canadian Civil Liberties Association, or CCLA, called on Ottawa to withdraw from a Safe Third Country agreement with the United States, under which Canada returns asylum seekers crossing the border. “There’s a danger that the U.S. is doing blanket detentions and deportations … and not honoring asylum claims,” said CCLA Executive Director Sukanya Pillay. Such a move would be diplomatically insulting and Hussen said the pact would remain unchanged for now.

U.S. judges in at least four states blocked federal authorities from enforcing President Donald Trump’s executive order restricting immigration from seven Muslim-majority countries. Judges in Massachusetts, Virginia and Washington state, each home to major international airports, issued their rulings late Saturday or early Sunday, following an order on Saturday night by U.S. District Judge Ann Donnelly in New York’s Brooklyn borough. Donnelly had ruled in a lawsuit by two men from Iraq being held at John F. Kennedy International Airport. While none of the rulings struck down the executive order, the growing number of orders could complicate the administration’s effort to enforce it. Trump’s order on Friday halted immigration from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen for 90 days, and stopped the resettlement of refugees for 120 days.

The new Republican president said these actions were needed “to protect the American people from terrorist attacks by foreign nationals admitted to the United States.” Condemnation of the order was swift and broad-based. Democratic politicians and civil rights groups weighed in, as well as U.S. allies who view the actions as discriminatory and divisive. Democratic attorneys general from California, New York and other states, meanwhile, were discussing whether to pursue their own legal challenges. The U.S. Department of Homeland Security on Sunday said it “will comply with judicial orders,” while enforcing Trump’s executive order in a manner that ensures those entering the United States “do not pose a threat to our country or the American people.”

Across the United States, lawyers worked overnight to help confused international travelers at airports. Activists and lawyers tracking the arrivals said some Border Patrol agents appeared to be disregarding the various court orders. “There is really no method to this madness,” Becca Heller, director of the New York-based International Refugee Assistance Project organization, told reporters on a conference call.

The White House defended President Donald Trump’s executive order halting entry to the U.S. from seven predominantly Muslim Middle East countries after judges blocked parts of the plan. Republican lawmakers suggested the president’s action was too broad and potentially damaging to the U.S. Trump’s chief of staff said the immigration order doesn’t include holders of green cards, although those people could be subject to additional steps when they travel overseas. A federal judge in Boston became the latest to curb Trump’s immigration order, directing customs officials at the city’s Logan International Airport on Sunday to let passengers from the seven countries with valid visas disembark and go on their way. Trump told his almost 23 million Twitter followers on Sunday morning: “Our country needs strong borders and extreme vetting, NOW. Look what is happening all over Europe and, indeed, the world – a horrible mess!”

[..] The judges’ moves came at the end of a day when a number of students, refugees and dual citizens were stuck overseas or detained, and some businesses, including Google, warned employees from those countries not to risk leaving the U.S. Spontaneous protests erupted at a number of airports around the nation, and world leaders including London’s mayor and Canada’s prime minister joined U.S. lawmakers in crying foul. Although some U.S. visa and green-card holders were blocked from boarding flights to the U.S. on Saturday after the order was issued, “the executive order doesn’t affect green-card holders moving forward,” Reince Priebus, the White House chief of staff, said Sunday on NBC’s “Meet the Press” in what seemed to be an adjustment to the administration’s policy.

He added that green-card holders – legal permanent residents – may be subject to additional screening if they travel to one of the seven countries targeted by the order. Even U.S. citizens may be affected: “I would suspect that if you’re American citizen traveling back and forth to Libya you’re likely to be subjected to further questioning when you come into an airport.,” Priebus said.

Theresa May has confirmed most UK citizens will not be affected by Donald Trump’s “Muslim ban” in a frantic bid to prevent a broad backlash against the policy from damaging her government. Foreign Secretary Boris Johnson sought the clarification in anxious calls to senior figures in Mr Trump’s team, highlighting the political problems the ban was causing Ms May’s administration. The Prime Minister had finally told Mr Johnson and Home Secretary Amber Rudd to “make representations” to their US counterparts, after she initially refused to condemn the ban sparking an angry backlash from her own MPs and others. Her early reluctance to criticise it came after she was the first foreign leader to visit Mr Trump at the White House, where the pair were pictured holding hands and the President delighted Ms May by expressing a desire to sign a quick post-Brexit trade deal with the UK.

The clarification to Mr Trump’s plan to temporarily ban travellers coming into the US from a group of predominantly Muslim countries – Iraq, Iran, Libya, Somalia, Sudan, Syria and Yemen – confirms that the only people affected will be dual citizens of the UK and a listed country, going directly to the US from the listed country. But it is unclear if the move by ministers will be enough to quell anger over the ban, much of which was targeted at its discriminatory nature rather than the effect on Britons alone. As events unfolded on Sunday, Conservatives demanded Mr Trump be forbidden from addressing Parliament on his state visit, Labour and the Lib Dems called for the President to be banned from the country and champion athlete Sir Mo Farah launched an outspoken attack on the ban.

In an epic week beginning with a dark and divisive inaugural speech, extraordinary attacks on a free press, a visit to the CIA that dishonored a monument to anonymous heroes who paid the ultimate price, and now an attempt to ban selected groups of Muslims (including interpreters who served with our forces in Iraq and those with green cards, though not those from countries with Trump hotels, or from really indispensable states like Saudi Arabia), he has lived down to expectations. Precisely because the problem is one of temperament and character, it will not get better. It will get worse, as power intoxicates Trump and those around him. It will probably end in calamity—substantial domestic protest and violence, a breakdown of international economic relationships, the collapse of major alliances, or perhaps one or more new wars (even with China) on top of the ones we already have.

It will not be surprising in the slightest if his term ends not in four or in eight years, but sooner, with impeachment or removal under the 25th Amendment. The sooner Americans get used to these likelihoods, the better. The question is, what should Americans do about it? To friends still thinking of serving as political appointees in this administration, beware: When you sell your soul to the Devil, he prefers to collect his purchase on the installment plan. Trump’s disregard for either Secretary of Defense Mattis or Secretary-designate Tillerson in his disastrous policy salvos this week, in favor of his White House advisers, tells you all you need to know about who is really in charge. To be associated with these people is going to be, for all but the strongest characters, an exercise in moral self-destruction.

For the community of conservative thinkers and experts, and more importantly, conservative politicians, this is a testing time. Either you stand up for your principles and for what you know is decent behavior, or you go down, if not now, then years from now, as a coward or opportunist. Your reputation will never recover, nor should it. Rifts are opening up among friends that will not be healed. The conservative movement of Ronald Reagan and Jack Kemp, of William F. Buckley and Irving Kristol, was always heterogeneous, but it more or less hung together. No more. New currents of thought, new alliances, new political configurations will emerge. The biggest split will be between those who draw a line and the power-sick—whose longing to have access to power, or influence it, or indeed to wield it themselves—causes them to fatally compromise their values.

For many more it will be a split between those obsessed with anxiety, hatred, and resentment, and those who can hear Lincoln’s call to the better angels of our nature, whose America is not replete with carnage, but a city on a hill. This is one of those clarifying moments in American history, and like most such, it came upon us unawares, although historians in later years will be able to trace the deep and the contingent causes that brought us to this day. There is nothing to fear in this fact; rather, patriots should embrace it. The story of the United States is, as Lincoln put it, a perpetual story of “a rebirth of freedom” and not just its inheritance from the founding generation.

America’s shift toward bilateral trade deals shows a total loss of faith in the ability of multilateral forums (G7 … G20) and U.N. agencies (IMF, etc.) to rebalance the world economy through effective international policy coordination. That was long time coming – a sad coda to the global economic (political) and financial order created at the Bretton Woods Conference in July 1944. It is at that time that the economic policy coordination was enshrined as one of the fundamental principles in the IMF’s Articles of Agreement, enjoining both surplus and deficit countries to balance out their external trade positions. What followed – to this day – has been an unending comedy of errors, recriminations and hypocrisy as policy coordination and rules of a sustainable free trade were shunned in pursuit of self-serving national interests.

Predictably, surplus countries refused to adjust (i.e., to reduce their surpluses by running stronger domestic demand to boost imports), extolled their “economic virtue” and continued to live off their trade partners. But deficit countries had no choice; they had to adjust (i.e., to reduce their deficits by shrinking their domestic demand and cutting down their imports) because they ran out of money and had to submit to foreign lenders demanding strict conditions with respect to the timing and magnitude of their trade adjustment. And here is the world we ended up with. Germany is currently running the world’s largest trade surplus of $300 billion. China is not very far behind with a $264 billion surplus. Japan’s $200 billion surplus is rapidly catching up with its large Asian neighbor, and a group of smaller export-driven East Asian countries is showing a steadily rising surplus of $300 billion.

These countries account for 40% of world GDP, but their combined trade surpluses of $1 trillion represent about 80% of the world’s total. In other words, nearly half of the world economy is a drag on the rest of the global demand, output and employment. Do you still wonder why the world economy is stuck in a hopelessly slow lane? With its systematic half-a-trillion dollars of quasi structural trade deficits, the U.S. accounts for 40% of the world’s total (trade deficits) and bears the brunt of what some would call beggar-thy-neighbor trade policies. In a more polished diplomatic “G something” language, you could also call that a “collateral damage” of uncoordinated global economic policies. Damage it is. Over the last two years, these trade deficits have taken an entire percentage point out of America’s sluggish economic growth.

Think also of the huge downward pressure on output and employment these deficits exerted, and continue to exert, in our import-competing industries. And think of this, too. While the surplus countries keep accumulating reserves and net foreign assets by recycling the money we pay for our imports, our trade deficits got us to a huge net foreign debt of $7.8 trillion during the first three quarters of last year – a $1 trillion increase from the same period in 2015. People carping about imaginary trade wars say that this is nothing to worry about. They believe that China, Japan and the rest of “dynamic Asia” will keep lending us the money we pay for their imports, and that they will be happy to hold $2.7 trillion of our IOUs – 46% of the total held by foreign investors – as they did at the end of last November. These, of course, are fairy tales. America’s trade problems are urgent and vitally important policy issues.

[..] my starting point is the understanding that human brains did not evolve to show us reality. We aren’t that smart. Instead, our brains create little movies in our heads, and yours can be completely different from mine. We see that situation now. Half the country thinks President Trump is well on his way to becoming a Hitler-like dictator. But many other Americans think Trump is an effective business person with good intentions. They can’t both be right. I use the word “filter” to describe an optional way of looking at the world. A good filter is one that makes you happy and does a good job of predicting what happens next. Let’s use that standard to compare the Hitler Filter to what I call the Persuasion Filter. The Hitler filter clearly isn’t making people happy. The people watching that movie are protesting in the streets.

Meanwhile, the people who see Trump as a good negotiator looking out for the country are quite happy with the job he has done so far. The Persuasion Filter says Trump opens with a big first offer and negotiates back to something reasonable. If you don’t recognize the method, it looks crazy, random, and racist. But what about predictions? The Persuasion Filter predicting Trump would become president when the Hitler Filter thought he had no chance. Now we have another chance to test the predictive power of the Persuasion Filter. If Trump is a Master Persuader, as I have been telling you for over a year, he just solved his biggest problem with immigration and you didn’t notice. The biggest problem is that his supporters on the right want more immigration control than he can (or should) deliver while his many critics on the left want far less.

Normally when you negotiate there is only one party on the other side. But in this case, Trump is negotiating two extremes in two different directions. It’s the toughest possible situation. Best case scenario is that 40% of the country want you dead when it’s all over. Not good. So what does a President Trump do when he is in an impossible situation? According to the Hitler Filter, he does more Hitler stuff, such as being more extreme than anyone expected with his recent immigration declarations. That filter accurately predicted that he would be “worse” once elected. Sure enough, his temporary immigration ban is more extreme than most people expected. If things never get worse from this point on, we would have to question the Hitler Filter. But if things get worse still, the Hitler Filter is looking good.

Compare to the Persuasion Filter. This filter says Trump always opens with an extreme first offer so he has room to negotiate to the middle. The temporary ban fits that model perfectly. On the immigration topic alone, both the Hitler Filter and the Persuasion Filter predict that we get to exactly the point we are at today. Let’s call that a tie in terms of predictive power. The hard part is predicting what happens next. The Persuasion Filter says Trump is negotiating with his critics on the extreme right at the same time as he is negotiating with his critics on the left. He needed one “opening offer” that would set up both sides for the next level of persuasion. And he found it. You just saw it.

Theresa May is set for a bracing final round of Brexit talks with the leaders of the devolved nations before the likely triggering of article 50, with the prime minister warning her counterparts from Scotland, Wales and Northern Ireland that they can have no veto over the process. May is to see the other leaders in Cardiff on Monday at a meeting of the joint ministerial committee (JMC), the forum for soliciting views from around the UK on the process of leaving the UK. While the first ministers of Scotland and Wales, Nicola Sturgeon and Carwyn Jones, have stressed they cannot accept a hard Brexit without membership of or full access to the EU’s single market, May is set to tell them this will not be possible.

“We will not agree on everything, but that doesn’t mean we will shy away from the necessary conversations and I hope we will have further constructive discussions,” May said in comments released ahead of the meeting. Last week’s supreme court judgment on the need for MPs to vote on triggering article 50 “made clear beyond doubt that relations with the EU are a matter for the UK government and UK parliament”, May said. While the main element of the ruling was to oblige May to put the article 50 process, which will trigger departure from the EU, as a bill to parliament – a subsidiary element of the judge’s decision was that the devolved governments could not veto the process.

A senior Italian official has warned that the UK and the European Union are heading into an “economic cold war” over Brexit that could wreak havoc on the west and weaken the continent. Mario Giro, Italy’s deputy foreign minister, said that while many countries in the EU had said the UK’s vote to leave the EU represented a loss to the union, there were more hardliners in the EU against the UK than it appeared. “When we are among the 27 [countries within the EU, not including the UK], the hardliners are more numerous than it appears. I cannot quote a country in particular at the moment. We will see it at the beginning of the negotiation,” Giro said in an interview with the Guardian.

He added: “We are hearing more and more that there are people – economic interests – who are thinking they can inherit some economic position, thinking that they can take away from the UK some of the position of the City of London. Not Italy, of course, because we are not in that position. And this will be an economic war. Let’s say an economic cold war, and we are not in favour of it.” The statement followed remarks this month by the British prime minister, Theresa May, in which she said the UK was prepared for a “hard Brexit” if she could not negotiate a reasonable agreement with the EU over Britain’s departure. She said attempts by other EU countries to wreak vengeance on the UK would be an “act of calamitous self-harm” because the UK in turn would be prepared to radically cut taxes to attract businesses.

Italian officials have always said their top priority in Brexit negotiations would be to guarantee the rights of hundreds of thousands of Italians who lived in the UK. Giro suggested that a coming “battle of interests” – which he described as a competition between economic interests, not necessarily individual states – could have terrible consequences. “This will be a disgrace. To enter into a new era of hard competition on big money questions involving companies, this is very bad for the western world. We don’t need these kinds of tensions at this time of a geopolitical Jurassic Park,” he said, meaning that it was a world where every interest was out for itself.

The eurozone must break up if its members are to thrive again, according to a former ECB official. Jürgen Stark, who served on the ECB’s executive board during the financial crisis, said it was time to “think the unthinkable” and work towards a “reset” of Europe that pulled power away from Brussels. The former vice-president of Germany’s Bundesbank said the creation of a two-speed eurozone, with France and Germany at its core, would help to ensure the smaller bloc’s survival. “We have to think the unthinkable. And it is already unthinkable to think about the restart of Europe, which means we have to be creative. But in order to be creative, you have to destruct [sic] something.” Mr Stark said countries such as Italy, which has seen its economy stagnate since the crisis, would be better off outside the single currency area.

“Italy was accustomed to this ongoing devaluation of the lira from the mid-Seventies until the late Nineties. Maybe they need devaluation and their own currency in order to become more competitive again,” he said. Speaking at an event organised by ETF Securities, Mr Stark said current accommodative ECB policy meant countries were likely to “muddle through” in the coming years and move closer “by coincidence”. However, he said the eurozone’s problems would resurface, regardless of the political landscape. “In the long run, in the context of a European reset, one has to discuss the issue of whether it is still appropriate to keep these countries with different economic structures and different economic performances together. There is no convergence anymore. “We have had divergence rather than convergence… from the very beginning.”

Mr Stark said Belgium, France, Luxembourg, the Netherlands and Germany “plus Austria and Finland” could form the core of a system with “staggered integration” for other countries such as Italy and Greece. While he described Marine Le Pen’s victory in French elections this year as “unlikely” due to the country’s voting system, Mr Stark said the Front National leader’s victory would also be the catalyst of a eurozone split. Mr Stark, who resigned from the ECB in 2011, said he “blamed” the central bank for allowing countries to drag their heels on reforms. “As long as the ECB gives a signal in its operations to governments that ‘we are the backstop’ and ‘we will prevent country ‘a’ or country ‘b’ from becoming insolvent’ – there will be no structural reforms,” he said.

[..] the dollar and sterling seesawed over the 20 years following the First World War, with one taking the lead from the other as the leading reserve currency and in turn giving back the lead. In fact, the period from 1919–1939 was really one in which the world had two major reserve currencies — dollars and sterling — operating side by side. Finally, in 1939, England suspended gold shipments in order to fight the Second World War and the role of sterling as a reliable store of value was greatly diminished apart from the U.K.’s special trading zone of Australia, Canada and other Commonwealth nations. The 1944 Bretton Woods conference was merely recognition of a process of dollar reserve dominance that had started in 1914. The significance of the process by which the dollar replaced sterling over a 30-year period has huge implications for you today.

Slippage in the dollar’s role as the leading global reserve currency is not necessarily something that would happen overnight, but is more likely to be a slow, steady process. Signs of this are already visible. In 2000, dollar assets were about 70% of global reserves. Today, the comparable figure is about 62%. If this trend continues, one could easily see the dollar fall below 50% in the not-too-distant future. It is equally obvious that a major creditor nation is emerging to challenge the U.S. today just as the U.S. emerged to challenge the U.K. in 1914. That power is China. The U.S. had massive gold inflows from 1914-1944. Although China’s gold purchases may have fallen off recently, it has been experiencing massive gold inflows. Gold reserves at the People’s Bank of China increased to 1,842 tonnes at the end of 2016, according to the China Gold Association. That’s up 11% from the 1,658 tonnes it held in June, 2015.

But China has acquired thousands of metric tonnes since without reporting these acquisitions to the IMF or World Gold Council. Based on available data on imports and the output of Chinese mines, actual Chinese government and private gold holdings are likely much higher. It’s hard to pinpoint because China operates through secret channels and does not officially report its gold holdings except at rare intervals. China’s gold acquisition is not the result of a formal gold standard, but is happening by stealth acquisitions on the market. They’re using intelligence and military assets, covert operations and market manipulation. But the result is the same. Gold’s been flowing to China in recent years, just as gold flowed to the U.S. before Bretton Woods.

The Dow-20,000 hats have come out of the drawer after an agonizingly long wait that had commenced in early December with the Dow Jones Industrial Average tantalizingly close to the sacred number before the selling started all over again. What a ride it has been. From the beginning of 2011 through January 27, 2017, so a little more than six years, the DJIA has soared 73%, from 11,577 to 20,094. Glorious!! But when it comes to revenues of the 30 Dow component companies – a reality that is harder to doctor than ex-bad-items adjusted earnings-per-share hyped by Wall Street – the picture turns morose. The 30 Dow component companies represent the leaders of their industries. They’re among the largest, most valuable, most iconic American companies. And they’re periodically booted out to accommodate a changed world.

[..] Ah-ha, you say. It’s all the oil bust’s fault. Without the oil companies that have been ravaged by the oil bust, revenues are fine. OK, maybe not fine. Revenues without the oil bust companies are up 13% since 2011. That’s an average annual growth rate of 2.5%, barely above the rate of inflation! But the DJIA hit 20,000 with the oil majors in the average. So in looking at the relationship between aggregate revenues and stock price movements, we need to leave them in the mix. And reality looks even worse. Apple, whose revenues have skyrocketed by over 1,000% since 2006, from $19.3 billion to $216 billion, became a Dow component in 2015, replacing AT&T. And its revenues weren’t part of the 30 Dow components until 2015. So here’s what the aggregate revenues of the Dow components look like without Apple (blue columns) and without Apple but with AT&T (brown columns). A pure stagnation fest:

In both scenarios, revenues in 2016 were lower than they had been in 2008. Only 2009 and 2010 were lower. So in terms of revenues, 2016 was for the Dow components ex-Apple the worst year since 2010! And this despite the five-year binge in acquisitions! So how have the last two years been? Don’t even ask. Of the 30 companies in the Dow, 16 sported declining revenues in 2016. And 17 sported declining revenues over the two-year span since 2014! Only two of them are oil companies! This table shows that inglorious list in all its beauty:

Greece’s public debt can be manageable, the eurozone bailout fund said on Sunday, responding to a leaked report by the IMF that the country’s debt will explode to 275% of GDP by 2060. A spokesman for the bailout fund, the European Stability Mechanism (ESM), said the path for Greek public finances agreed between Athens and the eurozone was credible and backed by contingency measures in case of unforeseen events. “We believe that Greece’s debt burden can be manageable, if the agreed reforms are fully implemented, thanks to the ESM’s exceptionally favorable loan conditions over the long term and the recently adopted short-term debt relief measures,” the ESM said. In the document, seen by the Financial Times, the IMF calculated that Greece’s debt load would reach 170% of gross domestic product by 2020 and 164% by 2022.

But it would become explosive thereafter and grow to 275% of GDP by 2060, the paper quoted the report as saying. The spokesman said, however, that the eurozone had promised to offer Greece additional debt relief if Athens delivers on all its reform promises. “As a result, we see no reason for an alarmistic assessment of Greece’s debt situation”. The IMF has long been calling for substantial eurozone debt relief for Athens, but Germany, which faces elections this year, has been strongly opposed to such a move until after 2018, when Greece is to finish all its promised reforms. The IMF assessment of Greek debt developments may make it impossible for the Fund to join the current bailout for Greece, now shouldered only by eurozone governments, because the fund’s policy is to enter programs which in the end allow a country to cope on its own. Eurozone governments want the IMF on board, but do not seem to be ready to provide the debt relief to Greece that is necessary for the Fund to join.

The Greek military was on high alert on Sunday after a Turkish gunboat carrying Chief of General Staff Hulusi Akar sailed into Greek waters and around the Imia islets at around 10.30 a.m. The Turkish gunboat was escorted by several assault craft carrying commandos, which also circled the islets that brought Greece and Turkey to the brink of war 21 years ago, almost to the day. Greek authorities responded to what is being viewed as Turkish provocation with warnings and dispatched the Hellenic Navy’s Krataios gunboat, which escorted the Turkish flotilla out of Greece’s territorial waters. Diplomatic officials believe the incident to be a response to a Greek Supreme Court ruling last week rejecting a request from Ankara for the extradition of eight Turkish servicemen accused of taking part in failed coup last summer. Turkish military authorities released photographs showing Akar on the gunboat, with Imia in the background.

At the height of the refugee crisis in Sept. 2015, the 63-year-old Marmarinos and the rest of the village’s fishermen gave up working to spend months saving families from the rough, cold waters. Many of them were seeking safety from the bombs falling on Syria. “Mothers, pregnant women, children,” Marmarinos recalled. “So many children, all in the waters, wet, in a horrible situation.” Pideris, 40, says the fishermen risked their own lives “because it was the humane thing to do.” He said refugees and migrants “would fall overboard, they didn’t know how to navigate, boats were left adrift, they’d lose their engines, they’d break apart and the sea would fill with people.” But today, it’s Pideris and Marmarinos who need help after a winter storm on January 9 dropped nearly two feet of snow in their village. The boat canopies couldn’t take the weight and capsized while tied up in the harbor.

The boats are the pair’s sole sources of income. Pideris said he was in shock. “I’ve been in danger at sea, fishing and helping refugees, and my boat sinks in the safety of the harbor,” he said. “My brain stopped. My heart stopped. I was the living dead.” Both vessels sat in the corrosive sea water for three days, until the roads cleared enough to bring in a crane. The electronics and engines on both vessels were destroyed and require thousands of dollars in repairs. The mayor of Lesbos says money from a humanitarian award — the Olof Palme prize, which given to the islanders for embracing migrants – will go toward the cost of repairs. Marmarinos says he’s proud “because I offered help and I see it’s coming back to me … Even if no one helped I’d still be proud and if it happens again, I’d do the same.” Marmarinos and Pideris hope to be fishing again by early next month.

The Arctic’s sea ice has been in decline for decades as pictured above comparing September 1984 to September 2016. The total area of persistent (4 years or older) ice has declined from 718,000 square miles to 42,000 square miles in the time period above. In the above images blue/grey ice is younger whereas white ice is older.

Over the last 30 years, a near constant flow of cash has inundated China and other emerging markets. It has lifted those economies, pulled hundreds of millions of people out of poverty, and dictated corporate expansion plans worldwide. That wave is now ebbing. This year will see the first net outflow of capital from emerging markets in 27 years, according to the Institute of International Finance, a trade group representing international bankers. The group expects more than $500 billion worth of cash previously invested in things like Chinese factories, Brazilian government bonds, and Nigerian stocks to cascade out of such markets this year. What’s going on? In a word: China. In a profound change of narrative for both the global economy and markets that are closely tied to it, the story of fast Chinese growth—a story that has soothed investors and corporate managers around the world since the 1980s—is looking increasingly tough to square with the evidence.

And it’s even tougher to imagine anything else like China—a billion new consumers joining the global economy—emerging any time soon. Of course, the slowdown in China isn’t confined to China. Over the last 30 years, countries worldwide have built their economies to service the needs of the People’s Republic. Brazil would be a case in point. The South American giant has done a brisk business digging up and selling China the iron needed to feed booming steel mills. (Brazil is the world’s second largest iron ore exporter, behind Australia.) But Chinese steel mills aren’t roaring like they used to. Crude steel production fell 2% during the first eight months of the year, a decline unprecedented in data going back roughly 20 years. As Chinese steel plants cooled, iron ore prices fell sharply. At roughly $55 a tonne, iron ore prices are down 60% from where they were at the end of 2013. And as prices for iron plummeted, so did revenues of big iron-ore exporters such as Brazil.

You read that right. Alliance for a Just Society just released a report. In it they looked at living expenses in every state, for singles as well as families. This is an attempt to figure out what a reasonable living wage would be. What’s a “living wage”? The study’s definition includes the ability to pay for luxuries items like housing, child care, utilities and savings. The conclusions, while known anecdotally by virtually every American (sans conservatives), are still chilling: Though $15 per hour is significantly higher than any minimum wage in the country, it is not a living wage in most states. A living wage was calculated for all 50 states and for Washington DC In 35 states and in Washington DC, a living wage for a single adult is more than $15 per hour. In no state is a living wage less than $14.26 per hour.

In fact, nationally, the living wage for a single adult is $16.87 per hour ($35,087 annually) – the weighted average of single adult living wages for all 50 states and Washington, D.C. Some of the people who have it the hardest? Childcare workers. In 2014, 582,970 people worked as child care providers at a median wage of $9.48 per hour. Let’s put it into perspective. According to the study, in order to get by on minimum wage as it is in each state right now, you would have to work an almost 111 hour week in Hawaii. You’d be better off in Virginia, where for $7.25 it would only take a touch over 103 hours a week to get by. IF YOU ARE SINGLE. If you’re a real lazybones or don’t like a little hard work, you can move to Washington or South Dakota where you only have to work for about 67 and half hours a week to get by.

Factory output fell in September for a second month as high inventories and lukewarm demand from overseas customers kept American producers bogged down. The 0.1% drop at manufacturers, which make up 75% of all production, followed a revised 0.4% decrease the prior month, a Federal Reserve report showed Friday. Total industrial production, which also includes mines and utilities, dropped 0.2%. A surge in the dollar since mid-2014 has made U.S. products more expensive in foreign markets at the same time the oil industry cuts back and companies contend with bloated stockpiles. Manufacturing’s woes are only partially being cushioned by steady purchases of automobiles that have led consumer spending in underpinning the economy.

“Manufacturing continues to be kind of soft,” said Joshua Shapiro at Maria Fiorini Ramirez in New York. “It’s a combination of weak foreign demand and inventories getting rebalanced. I’d expect another few months of flat-to-down manufacturing output.” Utility output climbed 1.3% for a second month as warmer September weather boosted demand for air conditioning. Mining production, which includes oil drilling, slumped 2%, the most in four months. Oil and gas well drilling decreased 4%. [..] manufacturing accounts for about 12% of the economy. The previous month’s reading was revised from a 0.5% drop.

Employment is taking a dive in industries that sell a lot of U.S.-made goods abroad, and things could get worse before they get better. The double whammy to exports from the stronger dollar and cooling overseas markets was bound to hit employment in the world’s largest economy. JPMorgan has put numbers to the damage. Export-oriented industries have been losing about 50,000 jobs a month for most of this year, after adding 9,000 a month on average in 2014, according to JPMorgan economist Jesse Edgerton. Recent manufacturing surveys hint the impact could worsen, and the employment erosion may extend into the first half of 2016, he predicts. In effect, that would mean private payrolls growth takes a step down to around 150,000 a month, from the booming 250,000-plus average of 2014.

“Employment is declining in industries exposed to exports, and we haven’t seen any sign the decline is slowing down,” Edgerton said. “The drag from job losses in export industries will linger on for some time at least.” Considering export-oriented jobs are among the better paying ones, that’s a pretty sobering forecast. U.S. jobs supported by goods exports, for example, pay as much as 18% more than the national average, according to government estimates. At a time of increased concern that growth is losing momentum, a strong labor market backed by jobs that pay well is key to sustaining consumer spending, the biggest part of the economy. Edgerton has pieced out the hit to employment, which isn’t easy to gauge from the Labor Department’s monthly payrolls report.

He developed a way to measure the share of each industry’s output that is exported, both directly and indirectly through sales to other industries that cater to overseas demand. Using that, he worked out how payrolls are faring in those businesses compared with counterparts that focus on the U.S. market. Trends in the top four industries with the largest export share — transportation equipment excluding motor vehicles; machinery; computer and electronic products; and primary metals — offer another reason for concern, Edgerton said. Payrolls have been slowing for decades in capital-intensive manufacturing businesses that dominate exports. So there’s little reason to expect export jobs will see a return to positive territory.

Companies with investment-grade credit ratings – the cream-of-the-crop “high-grade” corporate borrowers – have gorged on borrowed money at super-low interest rates over the past few years, as monetary policies put investors into trance. And interest on that mountain of debt, which grew another 4% in the second quarter, is now eating their earnings like never before. These companies – according to JPMorgan analysts cited by Bloomberg – have incurred $119 billion in interest expense over the 12 months through the second quarter. The most ever. With impeccable timing: for S&P 500 companies, revenues have been in a recession all year, and the last thing companies need now is higher expenses.

Risks are piling up too: according to Bloomberg, companies’ ability to pay these interest expenses, as measured by the interest coverage ratio, dropped to the lowest level since 2009. Companies also have to refinance that debt when it comes due. If they can’t, they’ll end up going through what their beaten-down brethren in the energy and mining sectors are undergoing right now: reshuffling assets and debts, some of it in bankruptcy court. But high-grade borrowers can always borrow – as long as they remain “high-grade.” And for years, they were on the gravy train riding toward ever lower interest rates: they could replace old higher-interest debt with new lower-interest debt. But now the bonanza is ending. Bloomberg:

As recently as 2012, companies were refinancing at interest rates that were 0.83 percentage point cheaper than the rates on the debt they were replacing, JPMorgan analysts said. That gap narrowed to 0.26 percentage point last year, even without a rise in interest rates, because the average coupon on newly issued debt increased. Companies saved a mere 0.21 percentage point in the second quarter on refinancings as investors demanded average yields of 3.12% to own high-grade corporate debt – about half a percentage point more than the post-crisis low in May 2013.

That was in the second quarter. Since then, conditions have worsened. Moody’s Aaa Corporate Bond Yield index, which tracks the highest-rated borrowers, was at 3.29% in early February. In July last year, it was even lower for a few moments. So refinancing old debt at these super-low interest rates was a deal. But last week, the index was over 4%. It currently sits at 3.93%. And the benefits of refinancing at ever lower yields are disappearing fast. What’s left is a record amount of debt, generating a record amount of interest expense, even at these still very low yields. “Increasingly alarming” is what Goldman’s credit strategists led by Lotfi Karoui called this deterioration of corporate balance sheets. And it will get worse as yields edge up and as corporate revenues and earnings sink deeper into the mire of the slowing global economy.

But these are the cream of the credit crop. At the other end of the spectrum – which the JPMorgan analysts (probably holding their nose) did not address – are the junk-rated masses of over-indebted corporate America. For deep-junk CCC-rated borrowers, replacing old debt with new debt has suddenly gotten to be much more expensive or even impossible, as yields have shot up from the low last June of around 8% to around 14% these days. Yields have risen not because of the Fed’s policies – ZIRP is still in place – but because investors are coming out of their trance and are opening their eyes and are finally demanding higher returns to take on these risks. Even high-grade borrowers are feeling the long-dormant urge by investors to be once again compensated for risk, at least a tiny bit.

History doesn’t repeat, but it often rhymes, as Mark Twain may (or may not) have said. And one of those repetitions is the preponderance of megamergers and acquisitions late in economic expansions and bull markets, which are the results of confidence brimming over in C-suites and the sense that opportunities are endless. And so the announcement of not one but two megadeals—privately held Dell mating with data-storage outfit EMC, and Anheuser-BuschInBev linking up with fellow brewer SABMiller —provoked a spate of commentary that they represented some fin-de-cycle phenomenon. As usual, these nuptials are expected to produce that most desired benefit of such unions: often-elusive synergies. That’s mainly a euphemism for cost-cutting, largely through reduced head counts, rather than the rare phenomenon of one plus one adding up to three, something seen mainly in the consultant community, not the real world.

But what really drives deals isn’t so much what’s happening with companies’ stocks as with the credit markets. And the Dell-EMC and AB InBev-SABMiller nuptials, if approved by regulators, will be made possible by nearly $120 billion from the corporate bond and loan markets. The brewers’ $106 billion merger reportedly would involve some $70 billion of borrowing, including about $55 billion in bonds and the rest in loans. The $67 billion Dell-EMC deal, meanwhile, would be funded by $49.5 billion in debt, along with new common equity and cash in the coffers. If either of those financing plans come to fruition, they would eclipse the record set by Verizon, which issued $49 billion in bonds to fund its acquisition of Vodafone’s minority stake in Verizon Wireless. The question is whether there is any limit to what Carl Sagan would describe as the billions and billions that the credit markets can conjure. The answer may determine how long the deal making can continue.

Around two-thirds of exporters at China’s largest trade fair expect the slowdown in their markets to persist for at least six months, a Reuters poll has found, with the country expected to announce its weakest economic growth in decades early next week. Many economists expect data released on Monday to show China’s third quarter GDP dipped below 7%, the slowest rate since the global financial crisis. A weak showing could possibly prompt Beijing to take more steps to stimulate the economy. In the vast, booth-filled halls of the biannual Canton Fair on the banks of the Pearl River in Guangzhou this week, a poll of 103 mostly small to medium sized Chinese manufacturers found they expected orders to rise an average of 1.83% this year, though production costs were expected to rise 5.6% in the coming 12 months.

“I feel great pressure right now,” said Kelvin Qiu, the manager of a factory making heaters and radiators based in northeastern China. “I have around 40% less customers than before and the fair is quieter,” he said, comparing activity with the previous Canton fair in April. The Canton fair draws tens of thousands of Chinese exporters and foreign buyers into one gargantuan venue, and has long been regarded as barometer for an economy that has been the world’s biggest exporter since 2009. The poll’s results reflect a gathering pessimism in the export sector, a major driver of the world’s second largest economy. A similar Reuters survey in April had been more bullish, as it showed expectations that orders would rise 3.1%. Exports, however, fell 5.5% in August and 3.7% in September, reflecting anaemic global demand for China-made goods.

36% of exporters polled saying they expected a fresh wave of factory closures. 36% also said they expected an export rebound within 6 months, though 32% said the export slowdown would persist for over one year given continued weakness in core markets like Europe and the United States. Since the previous Canton Fair in April, China’s stock market crash and surprise currency depreciation have clouded the economic outlook, with Beijing taking a series of desperate measures – including interest rate cuts and ramped up fiscal spending – to galvanize growth. Its efforts have had limited success so far. China’s dominance as an exporter has been undermined by its previously strengthening currency, soaring labor costs, and a strategic shift by the authorities away from an excessive reliance on exports to domestic consumption.

Chinese financial institutions including the central bank sold a record amount of foreign exchange in September, a sign capital outflows were more severe last month than was previously thought. The offshore yuan fell to a two-week low. A gauge of their foreign-currency assets declined by the equivalent of 761.3 billion yuan ($120 billion), exceeding an August drop of 723.8 billion yuan, People’s Bank of China data showed Friday. China devalued its currency on Aug. 11 and concerns about further depreciation and slowing economic growth, coupled with the prospect of a U.S. interest-rate increase, are spurring outflows of funds.

“This shows although outflows probably did slow in September from August, they didn’t slow as much as previously expected,” said Chen Xingdong, chief China economist at BNP Paribas in Beijing. “If you look at commercial banks and the central bank as a unit, in August the central bank took more of the outflows and in September commercial banks took more.” Previous data showed the decline in the central bank’s foreign reserves moderated last month, giving rise to speculation that pressure for the yuan to weaken had eased from August. The holdings declined by $43.3 billion to $3.51 trillion, after sliding a record $93.9 billion the previous month, as the PBOC sold dollars to support China’s exchange rate.

On Monday, the Chinese government will once again try to convince the world its troubled economy is not that bad off after all. Third-quarter GDP data will be released, and whether the growth rate beats or misses consensus estimates, it’s likely to be touted by the government as proof of the economy’s continued resilience. No doubt that’ll help further calm investors, whose worst fears about China have ebbed recently. Overly bearish perceptions of China’s economy have become “thoroughly divorced from facts on the ground” proclaims the latest China Beige Book study. In a survey conducted in October by Bank of America-Merrill Lynch, only 39% of fund managers queried considered China the biggest “tail risk,” down significantly from 54% a month earlier.

Those investors shouldn’t get too comfortable. The panic that roiled global stock and currency markets over the summer may well have been overblown. But the real risks to China’s economic well-being are long-term, and they haven’t diminished. In fact, the strong growth rates could be setting the stage for a harder landing later. Even the regime agrees that China’s economy is seriously flawed. Excess capacity is rampant in steel, cement and other industries. Debt has risen to astronomical levels. The growth model China used during its hyper-charged decades — unleashing productivity by tossing its 1.3 billion poor workers into the global supply chain – has lost steam as costs rise and the workforce ages.

How well is China tackling these problems? Not very. Debt continues to rise even as growth slows. IHS Global Insight estimates debt will increase to 254% of GDP in 2015, up from 248% last year. In all-too-many sick industries, zombie companies are being kept afloat by creditors and the government. Deeper free-market reform is needed to spur entrepreneurship and innovation and better allocate financial resources to the most efficient companies. Yet despite much talk from President Xi Jinping and his Communist Party comrades, progress has been glacial. The government’s new plan to improve the performance of bloated state enterprises is underwhelming.

Authorities have done little to make the banking sector more commercially oriented or to open the economy to greater foreign competition or capital flows. The government’s heavy-handed intervention to quell a mid-summer stock market swoon was rightly seen a step backwards. Above all, the economy needs to “rebalance” away from its unhealthy reliance on investment – which according to Goldman Sachs’ Ha Jiming, totaled 46% of GDP last year, more than during Mao’s disastrous Great Leap Forward.

Annual inflation in the euro zone turned negative in September due to sharply lower energy prices, the EU’s statistics office confirmed on Friday, maintaining pressure on the ECB to increase its asset purchases to boost prices. Eurostat said consumer prices in the 19 countries sharing the euro fell by 0.1% in the year to September, dipping below zero for the first time since March, and confirming its earlier estimate. Compared to the previous month, prices were 0.2% higher in September. Eurostat said milk, cheese and eggs were cheaper, while heating oil and motor fuel stripped almost a full percentage point from the annual rate. Restaurants and cafes, vegetables and tobacco had the biggest upward impact.

Excluding the most volatile components of unprocessed food and energy – what the ECB calls core inflation – prices were 0.8% up year-on-year, slightly down from the previous reading of 0.9%. Month-on-month, they rose 0.4%. Long term inflation expectations have dropped to their lowest since February, before the ECB’s asset purchases started, as China’s economic slowdown, the commodity rout and paltry euro zone lending growth reinforce pessimistic predictions. Under its money-printing quantitative easing scheme, the ECB is buying government bonds and other assets to pump around €1 trillion into the economy, aiming to lift inflation towards its target rate of just under 2%.

In Norway’s oil capital Stavanger, house prices are falling, unemployment is rising and orders of champagne and sushi sprinkled with gold are down – a taste of things to come for the rest of the country as slumping crude prices hit the economy. The oil-producing nation used to be the exception in Europe. At the height of the financial crisis in 2009, unemployment reached just 2.7%; when other nations have had to cut welfare spending, Oslo could rely on its $856-billion sovereign wealth fund to plug any budget deficit. But now it is joining the rest of Europe in its economic slump as oil prices have halved. GDP growth is expected to stagnate at 1.2% in 2015 and 2016. And the government expects to make its first ever net withdrawal from the fund next year as state oil revenues decline with crude prices.

“It is a new era for the Norwegian economy. We are no longer in a league of our own,” Governor Oeystein Olsen said when the central bank unexpectedly cut rates to 0.75% on Sept. 24 to support a slowing economy. Business conditions for companies in Stavanger and the surrounding region got even worse in the third quarter and the weaker sentiment is spreading to firms outside the energy industry, a survey said in September. Demand is lower and profitability is down, it said. Boosting competitiveness has been the mantra of the right-wing minority government of Prime Minister Erna Solberg, which is proposing to cut corporate tax to boost firms’ international competitiveness. Norway as an exception was most on show in Stavanger, the country’s fourth-largest city, with its compact center of white wooden houses and oil industry ships anchored in the harbor. It enjoyed the good times more than anywhere else.

The number of Africans trapped in poverty has surged by around 100 million over the past quarter century, the World Bank said on Friday, despite years of economic growth and multi-million dollar aid programs. The report’s figures, described as “staggering” by the bank’s Africa head Makhtar Diop, showed widespread malnutrition, and rising violence against civilians, particularly in central regions and the Horn of Africa. “It is projected that the world’s extreme poor will be increasingly concentrated in Africa,” Diop added in a foreword. A surge in population meant the proportion of Africans in poverty had actually fallen since 1990, but the actual numbers were up. In a major study of households taking stock of African economies and societies after two decades of relatively strong growth, the Bank said 388 million – 43% of the sub-Saharan region’s 900 million people – lived on less than $1.90 a day.

In 1990, at the start of the study period, the ratio was 56%, or 284 million. The findings present a mixed bag for countries that, on average, enjoyed economic growth of 4.5% over the last two decades, dubbed the era of ‘Africa Rising’ in contrast to the post-independence stagnation, war and decay that typified the 1970s and 1980s. A child born in Africa now is likely to live more than six years longer than one born in 1995, the study found, while adult literacy rates over the same period have risen 4 percentage points. However, the Bank defined Africa’s social achievements as “low in all domains” – for instance, tolerance of domestic violence in Africa is twice as high as other developing regions – and noted that the rates of improvement were leveling off.

“Despite the increase in school enrolment, today more than two out of five adults are unable to read or write,” the report said. “Nearly 2 in 5 children are malnourished and 1 in 8 women is underweight,” it continued. “At the other end of the spectrum, obesity is emerging as a new health concern.” Perhaps most disturbingly, the study presented more evidence of the ‘resource curse’ that afflicts states endowed with plentiful reserves of hydrocarbons or minerals, often the source of internal or external conflict, or corruption and government ineptitude. Citizens of resource-rich countries tended to be less literate, live 4.5 years less and have higher rates of malnutrition among women and children than other African states, the study found.

Doubts are growing about Kenya’s ability to keep economic growth on the boil as it battles a plunging stock market, surging debt costs and a weaker currency. Kenyan shilling bonds have lost more money this month than the local securities of 31 emerging markets, while equities in East Africa’s largest economy dropped the most out of 93 global indexes. Efforts to stabilize the shilling have sucked liquidity out of foreign exchange and money markets, spurring a scurry for cash that is driving short-term borrowing costs higher just as the central bank takes over the management of two lenders. An economic expansion that outstripped peers in sub-Saharan Africa since 2011 is slowing as attacks by Islamist militants decimate Kenya’s tourism industry and a drought cuts exports of tea, the two largest sources of foreign exchange.

As President Uhuru Kenyatta’s administration ramps up spending on transport and energy projects to keep fueling growth, budget and current-account deficits are swelling and interest rates are rising. “It’s not looking like there will be an inflexion point for the better any time soon,” Bryan Carter at Acadian Asset Management, who cut all his Kenya bond holdings earlier this year, said by phone from Boston. “The currency looks overvalued.” Yields on short-term Treasury bills have surged above longer-dated bonds, an anomaly known as an inverted yield curve that signals investors are more concerned about near-term repayment risks than economic prospects further out. Rates on 91-day T-bills jumped to 21.4% at an auction on Oct. 8, a record high. That compares with yields of 14.6% on 21 billion shillings ($204 million) of bonds maturing in March 2025.

The inverted curve is “indicative of short-term funding stress in the economy, which is typically followed by a slowdown of credit growth and cyclical economic growth,” Chris Becker at Investec in Johannesburg, said in a note. The World Bank cut its estimate for 2015 growth in Kenya to 5.4% on Thursday, compared with a December forecast of 6%, saying volatility in foreign-exchange markets and the subsequent monetary policy response will curb output. Kenya’s shilling has weakened 12% against the dollar this year amid a rout in emerging-market currencies. The central bank’s Monetary Policy Committee countered by raising the benchmark rate 300 basis points to 11.5%. Investors have been unnerved by the seizure of two small banks in as many months. Regulators placed Imperial Bank under administration on Tuesday, the same day the closely held lender was due to start trading bonds on the Nairobi Securities Exchange.

When ancient Romans looked back to their origins, they told two very different stories, but each had a similar message. One founder of the Roman race was Aeneas, a refugee from the losing side in the Trojan War, who endured storm and shipwreck around the Mediterranean before landing in Italy to establish his new home. The other was Romulus who, in order to find citizens for the little settlement he was building on the banks of the Tiber, declared it an “asylum” and welcomed any runaways and criminals who wanted to join. It was a remarkable story even in antiquity. Some of Rome’s enemies were known to have observed sharply that you could never trust men descended from a band of ruffians.

In the past 500 years, politicians in the West have often returned to ancient Rome and ancient Greece in search of models for their own decisions and policies (or, more often, for self-serving justifications). On questions of citizenship, they have found two wildly conflicting examples. The stories told by the democracy of ancient Athens were typical of the Greek cities. When they looked back to their origins, they imagined that the first Athenians sprang directly out of the soil of Athens itself. The difference was significant. The Athenians rigidly restricted the rights of citizenship, eventually insisting that people should have both a citizen father and a citizen mother to qualify. Ancient democracy came at a price: It was only possible to share political power equally if you severely limited those who were to be allowed to be equals and to join the democratic club.

That is a price that many European democracies are now wondering whether they must pay too. Rome was never a democracy in the Athenian sense. The Roman Empire, brutal as it could often be, was founded on very different principles of incorporation and of the free movement of people. Over the first thousand years of its history, from the eighth century B.C., it gradually shared the rights and protection of full Roman citizenship with the people that it had conquered, turning one-time enemies into Romans. That process culminated in 212 A.D., when the emperor Caracalla made every free inhabitant of the empire a citizen—perhaps 30 million people at once, the single biggest grant of citizenship in the history of the world.

When the Romans looked back to their beginnings, they saw themselves as a city of asylum seekers. John F. Kennedy, in his “Ich bin ein Berliner” speech in the middle of the Cold War, praised ideas of Roman citizenship as an inspiration for Western liberty. “Two thousand years ago,” he said, “the proudest boast was ‘civis Romanus sum’”: that is, “I am a Roman citizen.” He was referring to the freedoms guaranteed by citizen status, particularly rights of legal protection and, in the Roman context, immunity from particularly degrading forms of punishment, including crucifixion.

Fifty years after passage of the landmark law that rewrote U.S. immigration policy, nearly 59 million immigrants have arrived in the United States, pushing the country’s foreign-born share to a near record 14%. For the past half-century, these modern-era immigrants and their descendants have accounted for just over half the nation’s population growth and have reshaped its racial and ethnic composition. Looking ahead, new Pew Research Center U.S. population projections show that if current demographic trends continue, future immigrants and their descendants will be an even bigger source of population growth.

Between 2015 and 2065, they are projected to account for 88% of the U.S. population increase, or 103 million people, as the nation grows to 441 million. These are some key findings of a new Pew Research analysis of U.S. Census Bureau data and new Pew Research U.S. population projections through 2065, which provide a 100-year look at immigration’s impact on population growth and on racial and ethnic change. In addition, this report uses newly released Pew Research survey data to examine U.S. public attitudes toward immigration, and it employs census data to analyze changes in the characteristics of recently arrived immigrants and paint a statistical portrait of the historical and 2013 foreign-born populations.

Hungary will seal its border with Croatia from midnight on Friday, expanding one of the European Union’s toughest set of measures to stem the influx of refugees, Foreign Minister Peter Szijjarto said in Budapest. “This is the second-best option,” Szijjarto told reporters. “The best option, setting up an EU force to defend Greece’s external borders, was rejected in Brussels yesterday.” An EU summit on Thursday failed to reach a final agreement on recruiting Turkey to help control the flow of refugees as Russia’s bombing campaign in Syria threatens to push more people to seek safety. The bloc’s leaders also made little progress on how to redesign the system of distributing immigrants, forming an EU border-guard corps or on ensuring arrivals are properly processed.

Hungary has extended an existing barbed-wire fence on its border with Serbia to cover its frontier with Croatia. Prime Minister Viktor Orban warned this week that his government would complete the barrier if EU leaders fail to agree on closing the Greek border, the main entry point for Syrian and other Middle Eastern refugees into the 28-nation bloc. Croatia will now help transport migrants to its border with Slovenia, in agreement with its northwestern neighbor, Croatian Deputy Prime Minister Vesna Pusic told state TV late Friday. From Slovenia refugees are likely to travel to Austria and on to Germany. “Slovenia will not close its border unless Germany closes its border, in which case Croatia will be forced to do the same,” Pusic said. “We will discuss with Slovenia the number of people we can bring to them.”

More than 180,000 migrants have entered Croatia from Serbia since they started arriving in mid-September, according to police data. Most of them have since left the country to Hungary, while a minority entered Slovenia as they seek to reach western European countries. Several eastern European countries are trying to avoid hosting migrants and are against mandatory quotas for the distribution of refugees within the EU. More than 380,000 asylum seekers have crossed into Hungary from the western Balkans this year and the number may reach 700,000 by the end of 2015, government spokesman Zoltan Kovacs told reporters in Budapest on Friday. From Saturday, refugees won’t be able to enter Hungary from Croatia except at designated border crossings.

Idomeni is a small village sitting within comfortable walking distance of Greece’s border with Macedonia. The 2011 census put its population at just 154 inhabitants. The locals themselves tell you there is nothing remarkable about the place, except for the stream of refugees flocking to this outpost to cross into Macedonia. Yiannis Panagiotopoulos, an Athenian taxi driver recently ferried a newly arrived group of Syrians from Athens to Idomeni. “They were so well dressed. I asked for €1,000 expecting them to protest, and they immediately paid me in cash. The were Coptic Christians and said Saudi Arabia is giving each non-Muslim $2,000 and a smartphone to leave because they want Syria for Muslims only.” Everyone wants to get to Idomeni, and if you can’t afford a taxi, there are plenty of unofficial buses that’ll take you there for €35.

The buses are more or less an illegal operation. Certain cafes near Victoria Square sell the tickets for cash, no receipts, and the trip that should take five and a half hours ends up taking nine because of various meandering detours to avoid rumored police checkpoints. Along the way, service stations have bumped up their prices to cash in on this unexpected windfall. At one, hot meals carry a starting price of eight euros, an extortionate amount for crisis-era Greece. Sitting in the front of one such coach, crammed to the last seat as children sleep on coats laid in the aisle, was 34-year-old Yahyah Abbas from Aleppo in Syria. Before the war, he used to work in a cosmetics distribution company. Now, he said, there is nothing in Syria, “only the devil.” “Syria was the best country in the world. It was ruined by terrorists. I love Bashar al Assad, he is the best. But I cannot live in my country because of terrorists.”

[..] After months of chaos and violent scenes at the border this summer the operation at the border has now fallen into an efficient routine that works “most of the time,” Greek authorities say. The border with Macedonia opens every 15 minutes to accept a group of 50-80 people. When the buses finally arrive at Idomeni, they offload passengers at a rate relevant to the pace of the crossings. Greek police issue each bus load with a number for their group which represents the order in which they will cross. They estimate that on an average day around 5,000 people make the crossing. Volunteers meet the groups straight off the bus and direct them to food, water, toiletries, clothes and medical attention. Then, they wait in huge white UNHCR tents until their turn comes.

The EUs much-hyped deal with Turkey to stem the flow of migrants looked shaky on Friday after Ankara said Brussels had offered too little money and mocked Europe’s efforts to tackle the refugee crisis. Just hours after the EU announced the accord with great fanfare at a leaders’ summit, Ankara said the plan to cope with a crisis that has seen some 600,000 mostly Syrian migrants enter the EU this year was just a draft. Cracks in the deal emerged as Bulgaria’s president apologised after an Afghan refugee was shot dead crossing the border from Turkey. In the latest in a series of jabs at Europe over the crisis, Turkish President Recep Tayyip Erdogan ridiculed the bloc’s efforts to help Syrian refugees and challenged it to take Ankaras bid for EU membership more seriously.

“They announce they’ll take in 30,000 to 40,000 refugees and then they are nominated for the Nobel for that. We are hosting two and a half million refugees but nobody cares,” said Erdogan. Turkish Foreign Minister Feridun Sinirlioglu then slammed an offer of financial help made by top European Commission officials during a visit on Wednesday, saying his country needed at least €3 billion in the first year of the deal. “There is a financial package proposed by the EU and we told them it is unacceptable,” Sinirlioglu told reporters, adding that the action plan is “not final” and merely “a draft on which we are working.” Under the tentative agreement, Turkey had agreed to tackle people smugglers, cooperate with EU border authorities and put a brake on refugees fleeing the Syrian conflict from crossing by sea to Europe.

In exchange, European leaders agreed to speed up easing visa restrictions on Turkish citizens travelling to Europe and give Ankara more funds to tackle the problem, although it did not specify how much. As he announced the agreement on Thursday night, European Council President Donald Tusk had hailed the pact as a “major step forward” but warned that it “only makes sense if it effectively contains the flow of refugees.” European officials said they were still waiting for concrete steps from Turkey and said that the €3 billion demanded by Ankara would be a problem for the EUs 28 member states. Even as the summit was underway, the volatile situation on the EUs frontier with Turkey exploded into violence with the fatal Bulgarian border shooting, which the UN refugee agency said was the first of its kind.

The victim was among a group of 54 migrants spotted by a patrol near the southeastern town of Sredets close to the Turkish border and was wounded by a ricochet after border guards fired warning shots into the air, officials said. The migrants were not armed but they did not obey a police order to stop and put up resistance, they said. Bulgarian president Rosen Plevneliev said he “deeply regrets” the shooting but said it showed the need for “rapid common European measures to tackle the roots of the crisis.” The death adds to the toll of over 3,000 migrants who have died while trying to get to Europe this year, most of them drowning in the Mediterranean while trying to sail across in rubber dinghies or flimsy boats.

European leaders probably don’t want to hear this now, as they frantically try to close their borders to stop hundreds of thousands of desperate migrants and asylum seekers escaping hunger and violence in Africa and the Middle East. But they are dealing with the unstoppable force of demography. Fortified borders may slow it, somewhat. But the sooner Europe acknowledges it faces several decades of heavy immigration from its neighboring regions, the sooner it will develop the needed policies to help integrate large migrant populations into its economies and societies. That will be no easy task. It has long been a challenge for all rich countries, of course, but in crucial respects Europe does a particularly poor job.

Perhaps it’s not surprising, as a recent report by the OECD found, that it is harder for immigrants to get a job in EU nations than in most other rich countries. But that doesn’t explain why it is also harder for their European-born children, who report even more discrimination than their parents and suffer much higher rates of unemployment than the children of the native-born. Rather than fortifying borders, European countries would do better to improve on this record. The benefits would be substantial, for European citizens and the rest of the world. Over the summer, as Hungary hurried to lay razor wire along its southern border and E.U. leaders hashed out plans to destroy smugglers’ boats off the coast of North Africa, the United Nations Population Division quietly released its latest reassessment of future population growth.

Gone is the expectation that the world’s population will peak at 9 billion in 2050. Now the U.N. predicts it will hit almost 10 billion at midcentury and surpass 11 billion by 2100. And most of the growth will come from the poor, strife-ridden regions of the world that have been sending migrants scrambling to Europe in search of safety and a better life. The population of Africa, which has already grown 50% since the turn of the century, is expected to double by 2050, to 2.5 billion people. South Asia’s population may grow by more than half a billion. And Palestine’s population density is expected to double to 1,626 people per square kilometer (4,211 per square mile), three times that of densely populated India.

Over the next several decades, millions of people are likely to leave these regions, forced out by war, lack of opportunity and conflicts over resources set in motion by climate change. Rich Europe is inevitably going to be a prime destination of choice. “With Africa’s population likely to increase by more than three billion over the next 85 years, the EU could be facing a wave of migration that makes current debates about accepting hundreds of thousands of asylum seekers seem irrelevant,” wrote Adair Turner, the former chairman of Britain’s Financial Services Authority and now chairman of the Institute for New Economic Thinking.

The annual report in 2013 from a multibillion-dollar London private-equity firm that counts a French pastry baker and a Dutch shoemaker among its holdings touted a new opportunity with “promising organic and acquisitive growth potential.” That investment was the management of refugee camps. “The margins are very low,” said Willy Koch, the retired founder of the Swiss company, ORS Service, which runs a camp in Austria that overflowed this summer with migrants who crossed from the Balkans and Hungary. “One of the keys is, certainly, volume.” Since early 2014, more than a million people have claimed asylum in the EU. Germany alone is preparing for at least 800,000 asylum-seekers this year. The surge, experts say, amounts to the biggest movement of people in Europe since World War II.

The crisis has produced harrowing tales of tragic deaths and lives in upheaval. It is also giving shape to an industry that everyone from small Greek shop owners to some of America’s biggest pension funds are benefiting from: the business of migration. In many ways, private companies are increasingly defining the European migration experience. In some cases, the companies see potential to win favor with a future group of European consumers, a welcome jolt amid the Continent’s economic doldrums. In other cases, they are stepping in to help provide services that governments can’t or won’t. At times they have provoked protests from advocacy groups who accuse them of cutting corners in order to profit from human misery. Some of the businesses, in turn, say they are sensitive to the risks of working with vulnerable people, and they argue that neither governments nor charities can meet on their own the huge range of demands resulting from the tide of migrants now arriving in Europe.

“Because of our involvement it is a better service run more efficiently,” said Guy Semmens, partner at Geneva-based private-equity firm Argos Soditic, which previously invested in ORS. There are also profits to be made. In Germany, Air Berlin was paid some $350,000 last year operating charter flights to deport rejected asylum seekers on behalf of the government. In Sweden, the government paid a language-analysis firm $900,000 last year to verify asylum-seekers’ claims of where they were from. In Athens, a Western Union branch has been disbursing €20,000 a day to migrants, reaping fees on each transaction. “I’m making at least twice the money I was making last year,” said Mohammed Jafar, the Afghanistan-born owner of the branch. “I wouldn’t make this in any other country in Europe.”

Refugees blazed a new pathway through Europe on Wednesday, with hundreds hiking through cornfields to reach welcoming Croatia even as others faced tear gas and water cannons from Hungarian police determined to turn them away. The contrasting scenes along the Serbian border highlighted both the make-or-break resolve of the asylum seekers and the growing friction facing Europe, which has failed to create a coordinated policy for the unprecedented influx of economic migrants and war refugees from the Middle East, Africa, Afghanistan and Pakistan. “We hit a stone and we flow around it”, said Arazak Dubal, 28, a computer programmer from Damascus, who had been on the road for 18 days.

He and his three companions reached Belgrade only to discover on Facebook and WhatsApp that the Hungarian border was closed to refugees. “So I went to Google Maps, and here we are”, said Dubal, huffing in the hot afternoon as he trudged across the farm fields. A two-hour drive to the northeast -along Serbia’s frontier with Hungary- the route was slammed shut. Just steps from Hungary, thousands of people spent the night in the wet grass on the Serbian side of the border. Hours later, hundreds tried to punch through the cordon of razor wire and riot police massed near the Serbian border town of Horgos. But they ran headlong into security forces≠ who unleashed tear gas and pepper spray to drive them back. Some refugees were swatted by batons and crumpled to the ground in pain.

“Open the door! the refugees yelled as they hurled water bottles and debris at riot police. Nearby, children screamed for their missing parents. Water cannons sprayed crowds on the Serbian side, forcing refugees to retreat to a squalid squatters camp that took root just after Hungary closed the border Tuesday. There were no major injuries, but some refugees were treated by Serbian authorities for respiratory problems from the tear gas and at least one migrant had a leg injury, AP reported. It was the first major clash between security force and migrants since police used stun grenades to stop refugees from crossing into Macedonia from Greece almost a month ago “We fled wars and violence and did not expect such brutality and inhumane treatment in Europe”, said Amir Hassan, who was drenched from a water cannon and tried to wash tear gas from his eyes, according to AP.

Turkish authorities have announced that hundreds of refugees who have set up camp on a main road at Edirne near the Greek border will be forcibly removed in three days if they refuse to leave. Many others are holding out at Istanbul’s main bus station in the hope of reaching northern Europe by land rather than risk the perilous sea journey. Bus services from the main terminal in Istanbul to cities on the Greek and Bulgarian borders were suspended last week, prompting several hundred refugees, most of them Syrians, to take to the road in an attempt to reach the European Union on foot. In the small green spaces around the bus terminal, some refugees have set up camp, with families trying to shelter smaller children against the sun with blankets and jackets.

Renas, 25, a Syrian-Kurdish construction worker from Qamishli, said he had no other hope than trying to reach Europe to claim asylum. “We are running away from a war and from the oppression of [Syrian president] Bashar [al-Assad]. There is nothing in Syria anymore, no jobs, no life, no future. In Turkey life is very difficult, because we are not allowed to work and there are no jobs here.” Turkey is hosting approximately 2 million refugees, the largest such population in the world. But increasingly difficult living and working conditions, as well as the impossibility of claiming asylum in the country, has led a growing number of people to try to reach Europe via smugglers’ routes.

Renas said he did not want to risk the dangerous journey by sea. “I have several relatives who drowned on their way to Greece,” Renas said. “These boats are nothing but floating death traps, they are not safe at all.” On Tuesday at least 22 people drowned off the Turkish coast after their boat capsized. Most refugees have resorted to paying smugglers to take them from the Turkish coast to Greek islands after authorities cracked down on the routes from Turkey to Greece and Bulgaria via the land borders.

Bulgaria is sending more soldiers to strengthen controls along its border with Turkey and avoid a refugee influx that has overwhelmed its neighbours, Defense Minister Nikolay Nenchev said on Wednesday. “There is a change in the situation in the past few days and it is hard to predict where the refugee wave will head…so we are standing ready,” Nenchev told public BNR radio. Fifty soldiers have been sent to the border and a further 160 could be deployed by the end of Thursday. The Bulgarian army could send up to 1,000 troops to back up border police if needed, he added.

Bulgaria took the measures after reports that hundreds of mostly Syrian refugees have spent the night in the open near the Turkish border with Greece, which is also very close to Bulgarian-Turkish border. Bulgaria is a member of the European Union but not the border-free Schengen Area. About 660 migrants have tried to cross the Bulgarian-Turkish border in the past 25 hours but have returned voluntarily after they had seen that the border was well-guarded, the chief secretary of the interior ministry Georgi Kostov, told reporters. Bulgaria is a member of the European Union but not the border-free Schengen Area.

Anas Al-Asadi spent three months and €6,000 making his way from his home in Damascus to Germany, braving the frigid waters of the Mediterranean aboard leaky, overcrowded ships on three separate occasions, culminating in a rescue by the Italian Coast Guard and finally a bus across the Alps. For the next four months, he was bored stiff. Then the 26-year-old got a job through a municipal program in Pfungstadt, a German town 25 miles south of Frankfurt, where he landed in February. The work wasn’t exactly challenging for Al-Asadi, who had been an attorney in Syria, and it certainly wasn’t well paid. His employer was a local youth club, since private companies are barred from hiring people without work permits, and he earned just €1 per hour, the maximum allowed for new arrivals.

But he says even simply vacuuming and sorting library books helped him better understand German culture and forced him to learn the language. “I was just sitting there sleeping, eating, doing nothing,” said Al-Asadi, who has since gotten asylum and just started working as a waiter in a local cafe. “I asked if I could do something – anything.” The town of 24,000 is home to more than 100 refugees seeking to start the formal asylum process and 50 others who have been granted residency, with more sure to come. The best way to integrate them, local officials say, is to help them find work, even if it’s odd jobs at community centers.

Here’s what to look for when the Federal Open Market Committee releases its policy statement along with quarterly economic projections at 2 p.m. Thursday in Washington, and Federal Reserve Chair Janet Yellen holds a press conference at 2:30 p.m. he FOMC will weigh the impact on the U.S. outlook from slowing growth overseas and falling stock prices, as committee members determine whether to end almost seven years of near-zero interest rates. Economists are close to evenly divided on the outcome, with 59 of 113 surveyed by Bloomberg expecting the Fed to stand pat “It is a very finely balanced question,” said Jonathan Wright, a professor at Johns Hopkins University in Baltimore and a former economist at the central bank’s Division of Monetary Affairs. “It is close to a 50-50 call.”

While economic data have been “pretty compelling,” investors are skeptical the FOMC will want to move in the face of recent financial turbulence, said Stephen Stanley at Amherst Pierpont Securities. The FOMC’s forecasts of the benchmark fed funds rate, revealed in dot-filled charts representing each official’s projections, may suggest a more gradual pace of tightening over the next few years than was suggested in June, said Michael Hanson at Bank of America. “The most important thing investors will try to ascertain is the pace of hikes going forward,” he said. “Yellen has emphasized that it is not liftoff that matters but it is the pace of tightening and we will get some additional information on that.”

Yellen and her colleagues on the Federal Open Market Committee wrap up a two-day meeting on Thursday to debate whether to increase the benchmark federal funds rate, which they have held near zero since late 2008. If and when they do move, it won’t be like before, and they’ll be using new tools to lift rates higher. In the past, the central bank kept the fed funds rate at or near the target chosen by policy makers by injecting or draining bank reserves from the system via the New York Fed’s trading desk. The amounts of cash involved were small and the Fed was pretty good at hitting its desired rate. Not anymore. Three rounds of so-called quantitative easing from 2008 to 2014, in which the Fed bought bonds to support the economy, has swamped banks with cash –deposited with them by investors who sold bonds to the Fed.

That added $2.6 trillion of reserves in excess of requirements to banks’ accounts held at the Fed. It also boosted the size of the Fed’s own balance sheet to $4.5 trillion, a five-fold increase from pre-crisis levels. [..] With so much cash and little need for banks to borrow in the fed funds market, the Fed has lost the ability to lift the funds rate in the way that it did before the crisis. It has also decided for now against selling the bonds back to investors, which would shrink its own balance sheet and extinguish the excess reserves. Instead, Fed officials designed new tools to help the central bank raise rates without reducing its balance sheet, which it hopes to slowly shrink over years by letting the bonds it now holds mature, without reinvestment. Officials say they expect to phase out reinvestments sometime after liftoff.

Their main innovation, an overnight reverse repurchase agreement facility, is a powerful solution, but heavy usage may cause problems for banks trying to comply with new regulations installed in the wake of the financial crisis, said Zoltan Pozsar at Credit Suisse. The facility promises to drain reserves from the banks by encouraging investors to withdraw the deposits created when they sold bonds to the Fed, and place the cash in money-market mutual funds. Through overnight reverse repos, the Fed can borrow the cash from money funds at a specified rate and post securities as collateral, unwinding the trades the next day. In effect, the Fed will be borrowing back the money it created to buy the bonds while cutting out the middlemen in the banking system.

The U.S. Federal Reserve opened a two-day meeting Wednesday to weigh a historic interest rate increase amid calls for it to move gingerly as world economic growth slows. The World Bank has warned developing economies to prepare for more capital and currency market turmoil while the OECD urged the Fed to move slowly and make its policy plans clear, whatever it decides. Most analysts saw the Fed again putting off the long-awaited increase to the benchmark federal funds rate, which has been locked at 0-0.25% since the 2008 crisis, giving the world a massive supply of cheap dollars. While U.S. growth has been strong, still-weak inflation and the recent China-driven turmoil in global markets “most likely mean that the FOMC will leave rates unchanged at this week’s meeting,” said Harm Bandholz of UniCredit.

The Fed has not raised rates in more than nine years, and what would probably amount to an increase of 0.25 percentage point would represent a momentous break with the extraordinary crisis stance it has adopted since the 2008-2009 recession. It would begin what is expected to be a slow series of rate hikes toward a “normal” monetary policy stance of around 3% in the next two years. But it would also make the dollar more expensive and hike borrowing costs for developing economies around the world. The policy-setting Federal Open Market Committee, led by Fed Chairwoman Janet Yellen, will announce a decision at 1800 GMT Thursday. Yellen will then address the media, with analysts saying her justification will be as crucial to markets as the decision itself.

China’s stocks sank in the last 30 minutes of trading in thin volumes as traders tested the limits of state support amid the biggest price swings since 1997. The Shanghai Composite Index slid 2.1% to 3,086.60 at the close, wiping out an advance of as much as 1.7%, as material and drug companies slumped. The benchmark gauge jumped 4.9% on Wednesday in a last-hour rally – the hallmark of state-backed fund buying – after falling dropped 6.1% in the first two days of the week. Volatility is surging and turnover is slumping on concern government intervention will fail to shore up the world’s second-largest stock market amid signs of a deeper economic slowdown.

Price swings have been exacerbated by state investigations into market manipulation as well as the Federal Reserve’s interest-rate meeting this week. “The market is becoming increasingly volatile as state support has caused confusion to the market and investors,” said Li Jingyuan, head of securities investment at Shanghai Zhaoyi Asset Management. “Information on state buying isn’t transparent and it seems that the national team doesn’t have a clear strategy and tactics. So you see a volatile market as investors don’t follow state buying.”

Standard & Poor’s cut Japan’s long-term credit rating one level to A+, saying it sees little chance of the Abe government’s strategy turning around the poor outlook for economic growth and inflation over the next few years. The move comes just a day after the Bank of Japan refrained from boosting record asset purchases, betting there will be a resumption in growth and inflation. That’s left the onus on Prime Minister Shinzo Abe and his Cabinet to consider a fiscal stimulus package to boost what evidence indicates is a lackluster recovery in the second half of the year so far. “We believe that the government’s economic revival strategy – dubbed “Abenomics” – will not be able to reverse this deterioration in the next two to three years,” S&P said in a statement. “Economic support for Japan’s sovereign creditworthiness has continued to weaken.”

Japan’s problems are mounting, with inflation near zero, the economy contracting last quarter and debt rising as the population ages. The IMF estimates public debt will increase to about 247% of gross domestic product next year. Japan’s sovereign debt yield and bond risk have stayed low as the Bank of Japan pushes on with its unprecedented asset purchases. The benchmark 10-year government bond yield was at 0.37% on Wednesday, after touching a record low of 0.195% in January. Credit-default swaps insuring Japan’s sovereign notes have dropped 30 basis points this year to 37 basis points, according to data provider CMA. “The government’s fiscal reform plan released in June lacked details and specifics, making it look unreliable on how to ensure fiscal sustainability,” said Masaki Kuwahara at Nomura in Tokyo, who said the downgrade wasn’t a surprise after a cut by Moody’s in December.

“Today’s downgrade is a message that the government will need to have a more credible fiscal reform plan.” Toshihiro Uomoto, a credit strategist at Nomura, said the risk now is that overseas investors will take a more critical view of Abenomics. “Japan is trying to escape from deflation, but it’s not succeeding,” he said. “The perception is that the Bank of Japan’s policy isn’t having as much of an impact as it was originally aiming for.” Japan is now rated lower than China and South Korea – two of its key economic rivals – by S&P. South Korea was lifted one level to AA- on Tuesday, with S&P citing the nation’s sound fiscal position and relatively strong economic performance.

A glut of crude may keep oil prices low for the next 15 years, according to Goldman Sachs. There’s less than a 50% chance that prices will drop to $20 a barrel, most likely when refineries shut in October or March for maintenance, Jeffrey Currie, head of commodities research at the bank, said in an interview in Lake Louise, Alberta. Goldman’s long-term forecast for crude is at $50 a barrel, he said. Goldman cut its crude forecasts earlier this month, saying the global surplus of oil is bigger than it previously thought and that failure to reduce production fast enough may require prices to fall near $20 a barrel to clear the glut. Prices may touch that level when stockpiles are filled to capacity, forcing producers in some areas to cut output, Currie said Wednesday.

“When we think of the longer term oil price, yes we put it at $50 a barrel,” he said. “However the risks are to the downside given what’s happening in the other commodity markets and the macro markets more broadly.” Lower iron ore, copper and steel prices as well as weaker currencies in commodity-producing countries have reduced costs for oil companies, according to Currie. The world is shifting from an “investment phase” of a 30-year commodity cycle to an “exploitation phase,” with shale fields as an important source of output, he said.

The retrenchment in drilling for U.S. oil is threatening to leave a different market short: natural gas. “The impacts of oil rig counts extend beyond oil: the outlook for U.S. natural gas is critically dependent on the outcome of this balancing act in U.S. oil rigs,” Anthony Yuen, a strategist at Citigroup Inc. in New York, said in a report to clients Wednesday. “If the oil market remains oversupplied and oil-rig counts fall, the decline in associated gas production would leave the market short of gas.” Associated gas is the gas that comes out of oil wells along with the crude. Supplies of this byproduct from fields including the Bakken formation in North Dakota and the Eagle Ford in Texas may fall by about 1 billion cubic feet a day next year as drillers idle rigs in response to the collapse in oil prices, Yuen said.

That’s about 7% of U.S. residential gas demand. The U.S. Energy Information Administration has already forecast that shale gas production will drop in October for the fourth straight month, a record streak of declines. U.S. oil has lost half its value in the past year amid a worldwide glut of crude. Drillers have responded by sidelining almost 60% of the country’s oil rigs since Oct. 10. Crude producers in the lower 48 states may have to keep the number of working rigs low for a while longer to balance the global market, Yuen said. A recovery in the rig count may “exacerbate the current oversupplied environment” and weaken prices, he said.

If the 1997 Asian financial crisis was a heart attack for emerging markets, the current situation is akin to chronic cardiovascular disease, according to Macquarie analysts led by Viktor Shvets and Chetan Seth. In 1997, speculative attacks against the Thai baht forced the country to float and devalue its currency in a move that was swiftly followed by the Philippines, Malaysia, Singapore, and Indonesia. Then came a massive decline in Hong Kong’s stock market that led to losses in markets around the globe. While parallels exist between 1997 and the current emerging market selloff (notably in the form of a stronger dollar, which makes it more expensive for emerging-market countries to finance their debts, plus lower commodity prices and slowing trade), the Macquarie analysts reckon the current situation might actually be worse.

Instead of sharp heart attack (a la 1997), it is far more likely that EM economies and markets would face an extended period that can be best described as a “chronic disease”, with limited (if any) cures or exits, punctuated by occasional significant flare-ups (short of an outright heart attack). In many ways it is likely to be a far more painful and insidious process. In the meantime, any signs of significant strain (either at a country or corporate level) could easily freeze up the emerging market universe.

The crux of their argument is that despite the difficulties of 1997, its effects were mitigated by rising global leverage, liquidity, and trade shortly thereafter. This time around, those factors might not be there.

[A c]ombination of excessively loose monetary policies (particularly post 2000 bursting of dot-com bubble) and China’s integration into global trade systems has enabled both EMs and DMs to recover quickly. This does not describe the environment facing EMs and DMs over the next five to ten years. The combination of long-term structural shifts (primarily driven by the grinding deflationary progress of the Third Industrial Revolution, which first became apparent in early 1990s but matured into a global phenomenon over the last decade), is aggravated by the more recent impact of overleveraging and associated overcapacity.

China’s slowdown is rippling across Africa and these three nations are the most exposed, relying on demand from the Asian economy for almost half their exports: Republic of Congo, Angola and Mauritania. Oil accounts for the bulk of Angola’s and Congo’s exports, damaging their prospects after crude prices plunged 55% since the beginning of June last year to below $50 a barrel. The price of iron ore, which makes up more than 40% of Mauritania’s exports, has dropped by almost a third in the past year. The three nations each shipped more than 45% of their exports in 2014 to China, data from the IMF shows. “For countries like Angola, which basically only has one commodity, there is a huge knock when prices fall and less oil is being exported to China,” Christie Viljoen at NKC African Economics, said.

“It’s a case of when things are good, it’s really good, but when it turns bad, it’s really bad.” Angola, Africa’s second-largest oil producer after Nigeria, has been forced to devalue its currency twice since June and has slashed its budget by a quarter following a slump in revenue. Congo’s fiscal deficit almost doubled to 8.5% of gross domestic product in 2014 from the previous year and in May Finance Minister Gilbert Ondongo cut $500 million of spending from the 2015 budget to bring it down to $4.5 billion. Reliance on a single commodity and exposure to one country for the bulk of exports is a double-whammy. China’s slowdown means weaker currencies and higher import prices for these African nations, which in turn feeds into more pressure on their exchange rates and a run down of central bank reserves, said Viljoen.

“If you are at the top of the list in terms of dependence on China and your economy is not well diversified, there are a bunch of negative things which can fall like dominoes,” he said. While South Africa is the continent’s single biggest exporter to China – with shipments totaling $45 billion in 2014 – its exports are more diversified and destined to a wider range of countries. China buys 37% of South Africa’s goods, followed by the European Union at 20%. Commodities such as gold, platinum and iron ore still make up the bulk of exports at just over half, though vehicle shipments have grown in importance to reach 13% of the total, according to data from the South African Revenue Service.

There are many good reasons to gasp at Jeremy’s Corbyn’s planned assault on capital, but his enthusiasm for “People’s QE” is not one of them. Overt monetary financing of deficits – the technical term – is exactly what the world will need if the global economy tips into another recession with interest rates already at zero and debt ratios stretched to historic extremes. Governments that do not have such a contingency plan in place to combat a potential deflationary shock from East Asia should be hauled before their respective parliaments to account for their complacency. HSBC’s chief economist, Stephen King, argues such drastic measures may be our last resort in a “Titanic” world with few lifeboats left, if anything goes wrong. He is not alone in the City of London.

“A pervasive sense that the financial elites pulled a blinder – while austerity is for little people – explains in part why Mr Corbyn has suddenly stormed into the limelight, and why the US socialist Bernie Sanders has so upset the Democratic primaries” Jeremy Lawson, from Standard Life, gave his blessing to radical action this week, arguing central banks should be willing to fund fiscal stimulus directly, and even inject money “directly into household bank accounts” if need be. Mr Corbyn’s ideas are a variant of “helicopter money”, the term coined by Milton Friedman, the doyen of monetary orthodoxy, lest we forget. Friedman did not, of course, mean that banknotes should be dropped from the sky, though they could be in extremis, but rather that central banks have the means to create money to fund tax cuts, or to cover state spending, until the economy comes back to life.

We cannot revert to plain vanilla forms of quantitative easing at this stage. The various rounds of QE by the US Federal Reserve and the Bank of England after the Lehman crisis were assuredly better than nothing. They averted a depression. But little more can be extracted from pulling down long-term interest rates by a few more basis points. The trade-off between risk and reward has, in any case, turned negative. Much of the money has leaked into asset booms, greatly enriching the “haves”, with a painfully slow trickle-down to the rest of society. A pervasive sense that the financial elites pulled a blinder – while austerity is for little people – explains in part why Mr Corbyn has suddenly stormed into the limelight, and why the US socialist Bernie Sanders has so upset the Democratic primaries.

This is not a criticism of the Anglo-Saxon central banks. The public would not have accepted avant-garde QE or helicopter money at the time. The Fed’s Ben Bernanke faced impeachment calls by hard-liners in Congress even as it was. He did what was humanly possible. Yet if we have to do QE again – and right now the US and the UK are preparing to tighten, so it is not imminent – it would surely be better to inject the money directly into the veins of the real economy.

President Petro Poroshenko has banned two BBC correspondents from Ukraine along with many Russian journalists and public figures. The long-serving BBC Moscow correspondent Steve Rosenberg and producer Emma Wells have been barred from entering the country, according to a list published on the presidential website on Wednesday. The decree says those listed were banned for one year for being a “threat to national interests” or promoting “terrorist activities”. BBC cameraman Anton Chicherov was also banned, along with Spanish journalists Antonio Pampliega and Ángel Sastre, who went missing, presumed kidnapped, in Syria in July. The list targeted people involved in Russia’s 2014 annexation of Crimea and the aggression in eastern Ukraine, Poroshenko said, referring to the conflict with Russia-backed rebels that has continued in certain hotspots this year despite a February ceasefire.

Andrew Roy, the BBC’s foreign editor, said: “This is a shameful attack on media freedom. These sanctions are completely inappropriate and inexplicable measures to take against BBC journalists who are reporting the situation in Ukraine impartially and objectively and we call on the Ukrainian government to remove their names from this list immediately.’ The reason for the BBC correspondents’ ban was not clear, but media coverage of the conflict with the rebels – whom the authorities and local media often call “terrorists” – has been a sensitive subject. Russian television has covered the Ukrainian crisis in a negative light, frequently referring to the new Kiev government as a “fascist junta”, while international media has focused on civilian casualties and the use of cluster munitions in populated areas by both sides.

New Zealand’s government has blocked the $56m (£36m) purchase of a local farm by Chinese firm Shanghai Pengxin. The government said it was not satisfied that the sale of the Lochinver farm would be of substantial benefit to the country, which is a key requirement for a big land purchase. The surprise move comes after the body that oversees bids for sensitive assets in New Zealand had approved the sale. There have been growing concerns about foreign land ownership in New Zealand. Those fears were stoked after Shanghai Pengxin New Zealand, which is a unit of the Chinese parent firm Shanghai Pengxin, bought 16 dairy farms in the country in 2011. China is New Zealand’s biggest market for many dairy and meat products. Dairy products are also New Zealand’s biggest export.

The Chinese firm said in a statement that it was “surprised and extremely disappointed with the decision and will be considering our options”. The 13,800-hectare Lochinver farm is located in North Island and is used to breed sheep, as well as cattle for beef and dairy products. The Chinese government has encouraged its companies to look to overseas markets to meet the demands of its growing consumer class. Stevenson Group, the company selling the farm, said it was also disappointed by the outcome after a 14-month process. “We are unclear as to why this property is different to the many others that have been approved through the Overseas Investment Office process, given the obvious benefits both to the farm and to Stevenson Group,” it said in a statement.

As if a sharp fall in the price of milk, New Zealand’s biggest export, wasn’t bad enough, the country is now bracing for a summer drought that could further hurt farmers and raise the risk of recession. The most severe El Nino weather pattern in at least 18 years is brewing and set to bring dry winds and below-average rainfall to the South Pacific nation in the months ahead. That will play havoc with dairy farmers and other agricultural producers that together account for a third of New Zealand’s export earnings. While no economists are yet forecasting a recession, central bank Governor Graeme Wheeler last week said if the El Nino is severe and continues into the middle of 2016, a contraction could be the result. The National Institute of Water & Atmospheric Research says soil moisture levels are already falling in eastern regions and there is an elevated risk of drought later in the summer amid signs the weather event may be the worst since 1998.

New Zealand’s economy, while among the world’s most developed, is particularly vulnerable to nature turning against it. The country suffered its most recent recession in 2010 after an earthquake struck the city of Christchurch, while the two previous economic contractions in 2008 and 1998 coincided with severe droughts and slumps in financial market sentiment. Agriculture and food processing industries make up about 9% of the nation’s GDP, making the economy sensitive to climate swings and global demand. “Over history, to get into recession we need to have multiple shocks,” said Nathan Penny, an economist at ASB Bank Ltd. in Auckland. “A drought makes us vulnerable, and if we got a drought plus say a shock from China then that would make a recession quite possible.”